Whether you believe in following the pack or think it is a contrary indicator, investors should at least attempt to get a feel for sentiment towards their stocks. For that type of research, we know of no better service than the Motley Fools CAPS, which asks its massive users community to rate their opinion of whether a stock will Outperform or Underperform the broad indexes. Essentially, they have created the web’s more robust dataset of investor sentiment on individual stocks and that information can be useful in many cases. Social media has become a part of so many aspects of modern life, and investors are increasingly attempting to glean knowledge through social tools such as CAPS. Through our partnership with the Motley Fool, we are able to show that data and compare it against our valuation methodology.
For our daily screen we are looking at stocks that receive a 5-star, most bullish rating from the CAPS crowd and then sorted them according to market capitalization. There are more than 700 stocks that receive this level of support as far as investor sentiment in concerned, but the top ten by market cap are listed below with our Ockham valuation rating as well. You will notice by the nature of the companies that the wisdom of the crowd believes that defensive companies and emerging market plays are favored in this environment. Interestingly, the Ockham methodology has many contrarian aspects to it, yet we only disagree on one stock.
Huge Stocks Loved By the Crowd (Ticker) (Ockham rating)
- China Mobile (CHL) (Undervalued)
- Berkshire Hathaway (BRK.A & BRK.B) (Fairly Valued)
- Procter & Gamble (PG) (Undervalued)
- Johnson & Johnson (JNJ) (Undervalued)
- Nestle SA (NSRGF) (Fairly Valued)
- Petroleo Brasileiro (PBR) (Fairly Valued)
- BHP Billiton (BHP) (Overvalued)
- Roche Holding AG (RHHBY) (Fairly Valued)
- PepsiCo (PEP) (Undervalued)
- Unilever PLC (UL) (Fairly Valued)
