These Cold Stocks Are Heating Up

When a stock's share price is lower than a North Dakota thermometer in February, investors tend to give it the cold shoulder. But as the market warms to a stock's prospects, its price can heat up in a hurry. Alas, you can rarely tell that a stock is melting investors' hearts until after it's made that upward leap.

Taking the market's temperature
But Motley Fool CAPS' proprietary ratings, aggregated from the opinions and accuracy of 170,000-plus members, offer a great way to monitor investor sentiment. Following a CAPS rating trend can help us determine the best time to invest. Let's look at previously rated one- or two-star companies that have recently enjoyed a bump in investor confidence and see whether they're truly heating up -- or headed back to the deep freeze.

Source: Motley Fool CAPS; NA = not available.

Obviously, this is not a list of stocks to buy -- just a starting point for further research. Yet if some of the best investing minds are taking notice of these stocks, maybe we should too. 

Caution: Contents may be hot
With the success of oil and gas plays like EOG Resources (NYSE: EOG) and Noble Energy (NYSE: NBL) in the Niobrara play, investors are looking to some smaller players that have potential in the area like Samson Oil & Gas.

CAPS member verismotex likes the fact that Samson is one of the early players to realize the area's potential, while All-Star HallShadow has been keeping tabs on developments, such as its completion of its 3-D seismic data survey, but airs a note of caution in regards to its Bakken position:

This is an unfavorable development, obviously, but these Bakken wells are not instrumental to the company. It is roughly breaking even on an operating basis, and given the comparatively few wells that it can participate in here, it's not a particularly big deal. Samson did say that it intends to enter into long-term contracts for both drilling and fracturing stimulation services for its Goshen County acreage, so hopefully this will not become an issue there.

It's sometimes hard to follow these smaller players, particularly when they don't offer up much news themselves. But let us know in the comments section below or on the Samson Oil & Gas CAPS page just how hot you think this stock can get.

No marquee names
Blockbuster's bankruptcy and the decline of the bricks-and-mortar movie rental business model should continue to favorably impact Coinstar's Redbox kiosks. While the online model is growing in scope and importance, kiosks offered up by Redbox and, strangely enough, Blockbuster through its partnership with NCR should continue to thrive, at least for a while.

Yet with Netflix (Nasdaq: NFLX) stressing its move toward streaming, Redbox itself is going online this year and it has a chance to capture a good foothold. The problem with Netflix is its lackluster library of relevant titles. Coinstar could grab many viewers who are not that interested in indie flicks and "blockbuster" titles from 1980.

Redbox now accounts for 85% of Coinstar's revenues, and having smoothed over relations with the studios, it's in a very good position to capitalize on its rivals' shortcomings. With the introduction of video games at the kiosks, CAPS member daveynels thinks it's game time at Redbox.

As 86% of CAPS members rating the movie rental upstart think it can still put up market-beating numbers, this could make it the star of your portfolio. Add Coinstar to your watchlist to see what kind of reviews it gets.

ARM'd and dangerous
The same forces driving NVIDIA (Nasdaq: NVDA) higher are helping propel the stock of chip maker ARM Holdings to price levels it hasn't seen since 2001.

The mobile computing market is exploding and NVIDIA, emboldened by a $1.5 billion settlement, was encouraged enough to announce it was going to be challenging Intel on its own turf by developing an ARM-based PC central processor. Add in Microsoft further severing the Wintel hegemony by supporting ARM's architecture, and there's a powerful motivation for future growth.

All-Star TMFJoker notes 80% of all smartphones incorporate ARM chips while tixlong points out the breadth of their portfolio:

Key player in a rapidly growing industry- they hold the licenses for snapdragon, tegra and A4 processors, covering both the Android and iphone/ipad markets.

Add ARM to your watchlist to have all the Foolish news and analysis compiled in one location, then head over to the ARM Holdings CAPS page and chip in with your own thoughts on its potential.

Checking the mercury
Are these stocks invitingly warm or bitterly frosty? It pays to start your research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made all from a stock's CAPS page. Then weigh in with your own thoughts on which stocks you think are hot little numbers, and which offer cold comfort. It's free to sign up.