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 fortunes change and the market warms to a stock's prospects, its price can heat up in a hurry. Unfortunately, it's hard 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 of 180,000-plus members, offer a great way to monitor Investor sentiment. Following a CAPS rating trend, we can find previously low-rated 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.
Obviously, such stocks are not ones you automatically buy; rather, they're 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
Chip design testing house ChipMOS Technologies
ChipMOS, which counts the likes of Himax Technologies and Micron among its top customers, has been aggressively building out capacity throughout the early part of the year. At less than 4 times earnings estimates, the tester is looking pretty cheap since it supplies customers that supply Apple
The CAPS community is starting to come around to that thinking, too, as its CAPS star rating bounces back. Tell me on the ChipMOS Technologies CAPS page or in the comments box below your views on whether a fall introduction of the latest, greatest Apple product will boost it higher, and then add the stock to your Watchlist to be alerted to events as they occur.
The next big thing
Ne'er-do-well biotech Keryx Biopharmaceuticals
Where they're probably seeing hope is in Zerenex, Keryx's other drug in development, which it will now concentrate all of its efforts on. It's a therapy for patients with end-stage renal disease who suffer from elevated phosphate levels, and it's thought there's a greater likelihood for success here, though with a smaller addressable opportunity. I noted before, however, that success with a smaller market is preferable to failure with a bigger one.
Considering it's had some positive results in Japan with Zerenex, it may be something to build on. Keryx has been looking to improve upon Sanofi's
CAPS member NHWeston102 sees Keryx as a buyout opportunity for someone, but while the biotech has enjoyed a slight boost in confidence among investors, the low two-star rating the members of CAPS community has assigned it suggests they still think there are better places for your money.
Weigh in yourself on the Keryx Biopharmaceuticals CAPS page, and then add its stock to the Fool's personalized -- and free -- stock-tracking service, where you can be alerted if it makes a go of it with Zerenex.
Checking the mercury
Are these stocks invitingly warm or bitterly frosty? The Motley Fool has identified rock-solid investments that will lead you to "secure financial future." The report is free, but it's available only for a short time, so ask for your copy today and find out which dividend-paying stocks made the cut.
Fool contributor Rich Duprey holds no position in any company mentioned. Check out his holdings and a short bio. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.
More from The Motley Fool
Keryx Biopharma Down 17% Despite Drug Approval
Shares took a nosedive after the company's earnings report, but with a new FDA approval under its belt, this could be a buying opportunity for investors.
Despite FDA OK, Keryx Sinks on Gross-to-Net Surprise
The company's winning new customers, but that didn't help its third-quarter financials.
Keryx Biopharmaceuticals, Inc. Fell 8.6% In October -- Here's Why That Doesn't Matter
It was another down month for the small-cap biopharma, but this pending regulatory news promises to turn the company's fortunes around.