Is Wall Street Right About These Stocks?

Wall Street fawns over the companies in the following table. So why do our Motley Fool CAPS members disagree? They've tarred these stocks with one- and two-star ratings, signaling their lack of faith that the associated companies will outperform the market.

So who has it right? The professional class of analysts sitting in their paneled offices smoking stogies, or a motley crew of community investors pooling their best thoughts for others to share? We think we know who'll come out ahead. How about you?

Source: Motley Fool CAPS.

Now, as much as we love our CAPS community, don't sell these companies short just because they've garnered the lowest opinions. And don't buy 'em just because Wall Street says to, either. Investing requires closer diligence than that on your part, so use these ratings as a launching pad for your own research.

A heavy burden
After fears of running up against rationing at the Centers for Medicare and Medicaid Services (CMS) because of Provenge's $93,000 price tag, Dendreon ended up coming away relatively unscathed because the panel gave it a vote of confidence to approve paying for the prostate-cancer treatment. Amgen (Nasdaq: AMGN) is facing similar investor nervousness heading into its own appointment with CMS for anemia drugs Epogen and Aranesp.

The next hurdle Dendreon faces is the March preliminary report from CMS, followed by the final report in June on whether it will receive full reimbursement status. Billionaire George Soros, whatever you think of his politics, is a smooth investor, and he's made some big bets on the biotech, no doubt believing it will be successful in its efforts and expand the sales it's already achieved. With Johnson & Johnson and Medivation (Nasdaq: MDVN) crowding the field with therapies making the same trek through the regulatory morass as Provenge did, getting full reimbursement will give the drug a needed boost.

CAPS member Jajimon sees the upcoming CMS reports as catalysts overshadowing any negative sentiment.

Constant negative press since approval in mid-2010. Positive news catalysts (March Review, NJ Facility Ramp-Up, Potential Acquisition Interest) outweigh potential negative catalysts. Investors bid-up the stock to $54 post FDA approval, and once production ramps up in mid-late 2011, the stock should recover to a price in the $45-55 range.

Let us know on the Dendreon CAPS page whether you think the drugmaker will be detoured off the road to recovery.

A fat opportunity
The bankruptcy of bookseller Borders Group shows just how far the Internet retail space has come. Barnes & Noble (NYSE: BKS), itself at one time seemingly on a collision course with oblivion, has if nothing else postponed the day of reckoning because it embraced the digitization of the written word with its Nook e-reader. That's one of the reasons I suspected Borders would not be around to see another Christmas.

Of course, putting both Borders and B&N in this position was Amazon.com, and it, more than anyone else will benefit from Borders' demise. Its compelling value on e-commerce was more than the bricks-and-mortar retailer could cope with, while the Kindle e-reader led the path forward. Whether it will be able to sustain itself for an appreciable length of time, well, only time will tell.

CAPS member Sparticus501 sees a number of other platforms opening up for Amazon to make incursions into.

Borders going bankrupt - only Amazon's gain, where else are you going to get discount books. Amazon is also getting into the direct download of movies business, planning on at least getting some share of this business dominated by Netflix. This company is doing everything right and the stock should gain substantially.

Add Amazon.com to the Fool's free portfolio tracker to discover whether it can still kindle greater growth.

Construct an argument for growth
An investment in Sprint was every bit as much about how Clearwire (Nasdaq: CLWR) would grow and expand, and even though the carrier owns 54% of the wireless-service provider, a protracted fight over what it would charge Sprint for renting its lines promised to hurt both.

That squabble now seems to be coming to an amicable close, and the service provider is modestly planning new capital expenditures. That ought to help Sprint build on the subscriber gains it made in the most recent quarter, which was the first time in several years it had positive postpaid net additions.

CAPS member stubisch sees the progression of Android offerings as being yet another catalyst for the wireless carrier: "Android OS is only going to get better, giving Sprint legs again. Prior [poor customer] service will be forgotten ... look for network expansion once a full year of net positive customers happens."

Add Sprint to your Foolish watchlist, and then make a mad dash to the Sprint CAPS page and tell us your views on its future.

What's wrong with that?
It pays to start your own 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. Sign up today for the completely free service, and tell us which side of the street will be the ultimate winner.