Wall Street fawns over the companies listed in today's table. So why do our Motley Fool CAPS members disagree? They've tarred these stocks with one- and two-star ratings, showing a 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?
|
Stock |
CAPS Rating (out of 5) |
Wall Street Bullish Sentiment |
|---|---|---|
| Coinstar (Nasdaq: CSTR) | ** | 83% |
| Gulf Resources (Nasdaq: GFRE) | ** | 100% |
| Research In Motion (Nasdaq: RIMM) | ** | 72% |
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 ratings. And don't go long just because Wall Street says to. Investing requires closer diligence on your part, so use these ratings as a launching pad for your own research.
Building a future
While it's mostly known and discussed these days for its ubiquitous Redbox video rental kiosks, way back in its gauzy past Coinstar started out as a coin-drop entertainment company. You know, the ones who put those nearly impossible-to-win crane machines in arcades and made you waste $10 to win a $3 stuffed animal.
Then it hit on the idea of coin counting, no doubt from all those quarters it collected from the arcades, and today its green change counting machines seem every bit as ubiquitous as the movie kiosks. What's forgotten in the discussion on whether Redbox is a competitor to Netflix (Nasdaq: NFLX) or a supplemental service (that's my view) is the opportunity the coin-counting business represents. It can serve as a wedge to get more DVD kiosks installed.
Coinstar recently signed a deal with Safeway (NYSE: SWY) to install 1,400 of its big mean green machines in the grocery chain. While Redbox isn't a part of that deal -- Safeway still has Blockbuster kiosks installed -- it's obviously just a prelude to getting big mean red machines put in, too.
Yes, on-demand and streaming may one day be the dominant ways we get our video entertainment, but until then the DVD will be our preferred means of viewing movies and the proliferation of Redbox kiosks will help fuel Coinstar's growth.
Although its low two-star CAPS rating suggests members think there are better places for your money, 85% of them do agree it will outperform the broad market averages. gopyerk believes last quarter was just a fluke.
This has some real potential to grow over the next several quarters and I think the last quarter was more of a problem with zealous projection rather than the business model. Sometimes companies make mistakes, sometimes investors need to spot those mistakes and recognize them for what they are. In this case I am saying I trust them.
Add the kiosk king to your watchlist then head over to the Coinstar CAPS page and let us know if you think it can drop more coin for investors.
Needs more salt
In addition to being painted as a fraud, bromine producer Gulf Resources has to contend with not being able to successfully operate its business. Bromine is used in flame retardants, chemical manufacturing, and even the oil and gas exploration industry. Gulf sought to use bromine in wastewater treatment but recently had to close down production and convert it to pharmaceutical and chemical additives production.
While there are many reasons to be skeptical of Gulf's business, it seems interesting that a number of Chinese companies accused of fraudulent or suspect activity are clustered around wastewater treatment: RINO International, China Valves Technology (Nasdaq: CVVT), and Duoyuan Global Water. Perhaps because the seeming need is great, there are too many opportunities for fools to rush in -- and soon be parted with their money.
The tide seemingly hasn't turned yet on Gulf as 90% of CAPS members weighing in on the bromine producer think it will outperform the market, and the two Wall Street analysts following the stock have yet to be convinced of the aspersions cast against it.
Let us know on the Gulf Resources CAPS page whether the allegations are little more than bromides for a jittery market.
Going solo
Considering it makes 80% of its revenues from BlackBerry sales, the profit warning Research In Motion issued back in April would seem to justify the slack support the CAPS community has bestowed on it. The BlackBerry once had addicting qualities about it, and many adherents still swear by the smartphone, but there are so many choices available to consumers, it's not the essential tool it once was.
Today will be telling, too, when we see how its much-ballyhooed tablet computer fared in the market as the company announces earnings. A lot of people want to see if its sales trajectory exceeds that of Motorola Mobility's (NYSE: MMI) Xoom, which sold a lackluster 250,000 units its first month. Analysts have already ratcheted back expectations, so a lot hinges on guidance.
CAPS member astephan2525 is one who thinks RIM's best days are behind it.
Five years ago everyone wanted to have a Blackberry. People thought they were cool and important to be working in their free time. Now everyone wants to have an iPhone. C'est la vie.
Add RIM to the Fool's free portfolio tracker to have all the news and analysis about its progress aggregated in a single location.
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.
