Tuesday's Biggest Stock Stars

Here at the Fool, we usually don't pay attention to day-to-day price gyrations. Instead, we prefer to track each business' intrinsic value, which, by its very nature, changes a lot less frequently than Mr. Market's wild swings would have you believe.    

But at times, some price moves are just so big that investors should at least take notice -- especially when we Fools could have seen them coming.

The big winners  
With that in mind, I've summoned the help of our Motley Fool CAPS community to highlight yesterday's biggest five-star stock gainers (a five-star rating is the highest any stock can receive). Also, I've included a possible explanation (where I could find one, of course) for each move.

So, without further ado:

Did CAPS prophesy the rise?
The reason I selected the biggest five-star gainers, as opposed to the market's biggest overall winners, is simple: Stocks go up all the time, but the important thing is being able to predict the move beforehand.

Through a consensus of more than 60,000 Fools in our CAPS community, five-star stocks are the ones that our database believes will most likely outperform the market. By reverse-engineering some of the arguments made for these picks, our odds of finding the next big winner will surely improve.

For example, just this past May, CAPS All-Star saanca500 made mention of the vast potential of Omrix's blood-clotting protein, Evithrom. Well, on Tuesday, the FDA officially gave the drug its approval. Here's the sweet call:

My best rationale on this is their anti-bleed technology that can be used for any surgery, anytime. Also, these guys can manage their money -- every time they make money, they pay down their debts. There's nothing to be nervous about this year anyway.

Now, for the losers
Of course, winning isn't everything in the stock market. Stocks go down, too -- and oftentimes very, very fast.

Here are yesterday's biggest one-star decliners:  

Did CAPS call the fall?
Whereas Fools believe five-star stocks will outperform, one-star stocks are the investments that our CAPS community predicts will lag the market. By investigating a few of the underperform arguments made for these losers, we should have a much better chance of averting portfolio disaster in the future.  

Take, for instance, this underperform pitch written by CAPS All-Star gfire77 last January. Following this sage advice would have prevented a lot of heartache for Standard Pacific investors:

The housing bubble isn't done playing out. Concentrated in California and Florida, Standard Pacific's orders have fallen off a cliff. It invested all the money it made in the boom in inventories and land. This stock should get hit in the next year or so.

The final Foolish move
Investors often focus strictly on stock price movements (or the results), without realizing that developing a proper stock-picking process is what really counts most.

Over at Motley Fool CAPS, thousands of investors are Foolishly sharing insightful investment ideas and tips to help identify tomorrow's big winners and losers. Over time, consistently reverse-engineering winning (and losing) stocks will certainly help you become a more Foolish investor.

Log in to CAPS today. It's absolutely free.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Omrix is a Rule Breakers pick. The Fool has a five-star disclosure policy.