Thursday'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 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 our Motley Fool CAPS community to highlight yesterday's biggest five-star stock gainers (the highest CAPS rating 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 predict the pop?
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 that doesn't help you unless you can predict the move beforehand.

Through a consensus of more than 60,000 Fools in CAPS, our community considers its five-star stocks the most likely to 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, Aegean Marine, a fuel logistics company, has been a Foolish favorite for quite some time, laying claim to 109 outperform calls in CAPS. The following pitch -- written by All-Star blutzed44 last June -- is a clear example of just how important it is to invest in businesses with durable competitive advantages:

First, they literally have a serious moat (minus the alligators). Once they set a service station in a given part of the ocean they are almost immune to competition as long as they don't charge exorbitant prices.... Second, all the investments they make consist of boats and buildings. Often times, these things appreciate in value and are carried on the balance sheet at their original value. Plus, they will be able to depreciate such investments over a number of years.  

Now, for the losers
Of course, winning isn't everything in the stock market. Stocks go down, too -- often 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 inspire the least confidence from our CAPS community. By investigating a few of the bearish arguments made for these likely losers, we should have a much better chance of averting portfolio disaster in the future.   

For instance, take this Jo-Ann Stores undperform pitch found in CAPS:

Have you been in these stores? When I am, I always wonder how they stay in business. ... Plus, look at the insiders dumping the stock like crazy over the past six months. Revenue, not surprisingly has been flat over the past three years. Maybe they can increase margins some, but the upside on this stock even given better margins seems small.

JAS shares are down 28% since CAPS All-Star wvwheeling penned that prescient call late last May, reminding us of two important investment lessons: Trust your bearish intuition, and always keep a watchful eye on the insiders.       

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

Over at Motley Fool CAPS, thousands of investors are Foolishly sharing insightful investment tips to help identify tomorrow's big movers. 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 -- and a lot of fun! 

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy is always a winner.