I'll be writing a series of short articles to share with my fellow Fools all the tips and tricks I've yet discovered for getting the maximum profit, learning, and fun from our Motley Fool CAPS investment service. I consider each a "play" in the CAPS Playbook we're building for you. Make sense? Ready to join in? Here's the next one.
I did something new today: I rated a stock purely based on the trend behind a Motley Fool CAPS star rating. And I think I'm going to be right. Let me explain.
I noticed that as of Jan. 1, this stock was rated with five stars on CAPS (the top quintile). It then dropped to four stars in early February and three stars by early March. Now, in April, it sits at just two stars. Since Jan. 1, the share price itself is unchanged -- but this stock has fallen in our community's esteem quite dramatically. I'll tell you the name of the stock -- maybe you own it? -- in a minute, but first, let me explain how to check this information for your stocks.
- Look up any ticker you like (or type in the company's name) in CAPS.
- In the Stock Trends section -- just looking for the stock graph on each stock's CAPS page -- there's a new tab titled "CAPS RATING." Click it.
- There, you'll find a simple bar graph displaying changes in that stock's star rating since Nov. 1, 2006.
As you'd expect, some stocks change very little. Unit Corp.
By contrast, a small cap like Cambridge Display Technology
So which stock do I predict will underperform the S&P 500 over the next six to 12 months? Live Nation
- From its present perch at $22, we think Live Nation will underperform the S&P 500 for the next year or so.
- There are better places to put your money right now.
Disagree with me? Check out my CAPS page -- I'm TMFBreakerDave -- over the next few months to see how my underperform rating for Live Nation holds up.
It's one thing to see a stock with a two-star CAPS rating. But it's even more interesting to know the trend behind that rating. Take a look at your CAPS rating graphs, and follow along with the investors who've now rated one or more stocks on Motley Fool CAPS. We're building the world's most valuable community intelligence database. You and I can not only contribute to it, but also learn from it, every day.
To sign up for CAPS, entirely free, click here.
Previous pages from the CAPS Playbook:
Fool co-founder David Gardner does not own shares in any of the companies mentioned in this article. Unit Corp. is a Motley Fool Hidden Gems pick. The Fool has a disclosure policy.