Thursday's Biggest Stock Stars

We at The Fool usually don't pay attention to day-to-day price gyrations. We prefer to track each business's 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 Thursday's biggest gainers among the stocks with a top CAPS rating of five stars. I've also included a possible explanation -- where I could find one, of course -- for each move.

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 or even some of the most actively traded stocks -- like Oracle (NASDAQ:ORCL) and Cisco Systems (NASDAQ:CSCO) -- is simple: Stocks go up all the time, but unless you were able to predict the pop beforehand, what does it matter?    

Through a consensus of more than 65,000 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, Taseko Mines, a Vancouver, Canada-based copper mine, has maintained a five-star rating for the past four months. Last June, I even featured the stock in this article, where I touched on Taseko's intriguing valuation and massive prospects. 

This outperform pitch -- found on Taseko's CAPS page -- explains just what our community loved about it:

Small-cap Canadian copper miner with 3 mines. One in production (Gibraltar Mine), the second starting in 2008 (Harmony), and the third will begin producing around 2011 (Prosperity). The Prosperity Project is touted as the largest copper deposit in BC. The Company has good financials and an attractive share price. I like this as a long term play (5 + years).

Since CAPS All-Star HoustonMatt made that call back in April, Taseko is up an unbelievable 87%. And year over year, the stock has returned 142%.

The Foolish takeaway? Have a detailed understanding of everything that your company owns. By knowing the potential risks and rewards of all the assets in the pipeline, you'll be ahead of most investors in determining what the stock is really worth.

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 the market, one-star stocks inspire the least confidence from our CAPS community. By investigating a few of the bearish arguments made for these losers, we should have a better chance of averting portfolio disaster in the future.   

Take, for instance, this Circuit City underperform pitch found in CAPS:

Best Buy and Wal-Mart (NYSE:WMT) will squeeze them out. Wal-Mart can beat them on price, and Best Buy beats them on customer service, selection, and every other category. 

Anyone remember Montgomery Ward?

The Richmond, Va.-based electronics retailer, not surprisingly, is down a depressing 55% since CAPS All-Star BLAYNE100 penned that pitch last December.

The bearish lesson? Stay away from businesses that are stuck in the middle. As we mention all the time here at the Fool, companies generally either compete on price or quality. If a company is being pummeled on both sides of the equation, it's often just a matter of time before the stock gets smoked, too.

The final Foolish move
Investors often focus strictly on stock price movements (or the results), without realizing that developing a proper stock-picking process 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 help you become a more Foolish investor.

Log in to CAPS today. It's absolutely free -- and a lot of fun!