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 to tell that a stock is melting investors' hearts until after it has 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.

Today we see that biotech MannKind (Nasdaq: MNKD ) and Sirius XM Radio (Nasdaq: SIRI ) have moved from a two-star rating on CAPS to three stars. Obviously, you don't automatically buy them; rather, this becomes a starting point for further research. Yet if some of the best investing minds are taking notice of these stocks and upgrading their estimation of their prospects, maybe we should, too.

Caution: Contents may be hot
On the surface it seems MannKind should be successful with its lead investigational drug, Afrezza, an inhalable form of insulin therapy. The fast-acting vaporized drug has made it through the FDA's regulatory maze, and now MannKind only has to prove the efficacy of the delivery device to keep the agency from standing athwart approval. The inhaler it wants to bring to market isn't the one it used in the trials, so it will need to prove the inhaler is equivalent.

While that's the regulatory case, it's not the whole picture. There's competition, past and future, and there's the question of whether MannKind can wait out the FDA's decision-making timetable. It's well-known that Pfizer (NYSE: PFE ) had a disappointing run with inhalable insulin and lost almost $3 billion on the venture before shutting it down. Novo Nordisk and Eli Lilly (NYSE: LLY ) quickly followed suit, canceling their programs. On the horizon is privately held Dance Pharmaceuticals, though it's still years away from even coming close to bringing a drug to market.

On the financial side of the ledger, Alfred Mann has committed to financing his company's efforts, but it's an expensive process, and stock offerings dilute current shareholders. Then again, he has also shown a willingness to put his own money where his mouth is, having invested more than $1 billion in open-market share purchases, so he has more skin in the game than anyone.

CAPS member TMFMassimo would love to see Afrezza come to market, but he still feels the many risks outweigh the potential for success, noting, "It has been relying on its CEO for cash injections and had major job cuts last year. Its financial status is fragile to say the least."

http://www.fool.com/investing/general/2012/08/21/mannkind--sirius-are-heating-up.aspx