The market may take Wall Street analysts' downgrades seriously -- at least for a day or two -- but here at The Motley Fool, we don't. We pay much closer attention to the collective knowledge of our 180,000-plus Motley Fool CAPS members. When they downgrade a stock, I like to take a second look to see why.

Below, I've listed three stocks that our CAPS members have downgraded to a lowly one- or two-star rating over the past six months:

Company

Rating 6 Months Ago
(out of 5)

Rating Today
(out of 5)

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Janus Capital Group (NYSE: JNS)

****

**

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Harbin Electric (Nasdaq: HRBN)

****

*

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Conn's (Nasdaq: CONN)

****

**

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Source: Motley Fool CAPS.

Janus Capital Group
Asset management companies are driven by one thing over the long term: beating the market. That's something Janus has struggled to do recently, as only 8% of the company's equity mutual fund assets beat the majority of their Lipper peers over the past year. As a result, assets under management were in decline even before the recent market downturn. With banks like Wells Fargo (NYSE: WFC) and JPMorgan Chase (NYSE: JPM) trying to increase their asset management businesses, which is less risky than the trading that caused the financial crisis, the competition is fierce.

With that in mind, the stock's price is just too high for CAPS member HFInvestor, who says:

Valuation much higher than peers. Turnaround in flows is more than priced into current stock price. Either JNS valuatiton will decline or peer group (US asset managers) will increase.

Harbin Electric
It's been a roller-coaster year for Harbin Electric investors. One day the stock is up big on hope that a buyout from management will come to fruition, then that hope evaporates as short-sellers cast their doubts. China MediaExpress, Sino Clean Energy (Nasdaq: SCEI), and Longtop Financial are a few of the Chinese companies that have also come under fire from short-sellers and been accused of flat-out fraud. And now Harbin is caught in the mix. The question is: Do you trust this Chinese company or not? CAPS members have changed their minds on the stock, with 75 CAPS All-Stars now giving the stock a thumbs-down.

CAPS All-Star DaddioResources says, "I do not trust the management of this Company. Another Chinese problem entity in my book. Time to short Harbin Electric...."

Conn's
As much as retailers like to think more is better, sometimes that just isn't the case. A hodgepodge of electronics, appliances, and furniture aren't attracting customers the way they once did, as Sears Holdings (Nasdaq: SHLD), Best Buy, and Conn's are finding out. That's left Conn's with falling sales and a net loss over the past year, and CAPS investors have seen enough.

Bankrupt electronics retailer Circuit City may be a tough comparison, but CAPS member gabwoodgab thinks, "CONN is going to fail by the same model that Circuit City crumbled to: trying to win on price against Best Buy."

That and a two-star rating are enough for me to at least pause when analyzing Conn's future.

Foolish bottom line
A stock upgraded to four or five stars has earned a little more due diligence, if not a spot on your Foolish watchlist. A one- or two-star rating is worth a second look and may signal that it's time to sell. Either way, the collective wisdom of the CAPS community can help steer Fools toward winning investments.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

The Motley Fool owns shares of Best Buy, Wells Fargo, and JPMorgan Chase, and has created a ratio put spread position on Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.