Think of investor sentiment as a pendulum that swings in tandem with a company's share price. When investors begin to think highly of your company, its stock might also start heading in the right direction. Alas, you can rarely tell when investors are warming to a stock until after it's made that upward swing.

An astrolabe for investors
But Motley Fool CAPS' proprietary ratings, aggregated from the opinions and accuracy of 115,000-plus members, offer a great way to monitor investor sentiment. Like astronomers scanning the skies, investors can follow a stock's stars through its CAPS rating trend, tracking investor sentiment to help determine the best time to invest. Data suggests that CAPS' highest-rated stocks performed best while the lowest rated did worst, so let's look at previously rated one- or two-star companies that have recently enjoyed a bump in investor confidence and see whether the stars are really aligning in their favor.


CAPS Rating (out of 5 max)

Recent Price

Next Year Estimated EPS Growth

Amylin Pharmaceuticals (NASDAQ:AMLN)




Cooper Tire & Rubber (NYSE:CTB)




Harley-Davidson (NYSE:HOG)




MoneyGram International (NYSE:MGI)








Source: Motley Fool CAPS, Yahoo! Finance.

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.

The sun's always shining somewhere
At more than $5 billion in trailing revenues, Western Union (NYSE:WU) might be the big name in the money transfer game, but MoneyGram International at $1 billion is no slouch either. Yet with shares trading at under $2 a share, it's a long way away from the approximate $20 a stub MoneyGram was offered by Euronet Worldwide (NASDAQ:EEFT) last year. CAPS member Vixx01 believes the money transfer maven is getting back to basics with two recent acquisitions in Spain and foresees a time of resurrection.

Having worked in the payments industry, I am *very* impressed by their core business model and feel it's been beaten down more than it deserves.

This is an industry that is on fire, with a pretty good sized moat that takes decades to build into what is essentially a cash machine. They douple dip with their fee structure-in that you pay to send money and you pay to collect (through a currency conversion fee).

The subprime mess and bad CEO descions have hamstringed them...but it is survivable. They are growing in niche markets (aquisitions in Spain) and getting back to fundamentals.

The prognosis doesn't look better on the surface for Amylin Pharmaceuticals; analysts continue to downgrade the pharma -- its diabetes drug Byetta is linked to cases of pancreatitis resulting in a reported six deaths. Yet there is no definitive causal link between the drug and pancreatitis, and new research says that a once-a-week formulation of Byetta is even better than the current twice-a-day version for controlling blood sugar.

Top-rated CAPS All-Star member TMFBreakerJava sees this as a chance to get a potential blockbuster drug at a bargain basement price: "Promising results for Byetta offer the prospect of a better drug for diabetes. A potential blockbuster at a knockdown price. Buy!"

Shine your starlight
So are these stocks driving ahead or ready to crash? 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 shooting stars or supernovas. Since it's free to sign up and post your thoughts, why not use this opportunity to take your star turn?

YRC Worldwide is a Motley Fool Hidden Gems Pay Dirt pick. Western Union is an Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.