95 740 running too cold

I have noticed the past few days that my 95 740i is running too cold. Sometimes on short trips without highway driving, the temp gauge will only reach the 1/4 mark. At times the gauge will make it to the 1/2 or straight up mark, but will fall back again to the 1/4 mark. Also, there have been times when the car idles poorly at stop lights. This poor idle seems to only happen when the temp gauge is showing a low temp. I've checked to coolant and its fine. I haven't checked the thermostat yet, but I've also heard of a coolant temperature sensor located someplace under the hood. Any thoughts on what the trouble could be? Where is the location of this coolant temperature sensor?

My bet would be that the thermostat is stuck open. Dont know off the top of my head where the temp sensor is, but check out realoem.com...enter your cars info and look up the part. That will give you a good diagram for the location of the sensor.

classic open thermostat symptoms