Friday'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 Friday'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:

Company

Friday's % Gain

Probable Catalyst

Aegean Marine Petroleum Network

14.20%

Bullish article in Investor's Business Daily

ActiveIdentity (Nasdaq: ACTI  )

6.61%

N/A

EPCOS (NYSE: EPC  )

6.45%

N/A

Ceragon Networks

6.38%

N/A

Accenture (NYSE: ACN  )

5.87%

Strong Q4 results

Did CAPS predict the pop?
The reason I selected the biggest five-star gainers, as opposed to the market's biggest overall winners -- like 3Com (Nasdaq: COMS  ) and Travelzoo (Nasdaq: TZOO  ) -- 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, Motley Fool Inside Value pick Accenture has nearly 400 players calling outperform on its stock, while just 16 are bearish.

This outperform pitch -- pulled from Accenture's CAPS page -- gives us a glimpse of what our community has been so fond of:

ACN is the blue chip of IT Services: intense leadership, well-trained staff, always a step or two ahead of its competitors. ACN is moving aggressively into transformational consulting: taking over, running, and improving client operations. This is riskier but produces larger, more stable cash flows than traditionally cyclical and seasonal consulting.

Since CAPS player jfjf88 made that argument in August 2006, ACN has returned a sweet 41%.

The bullish takeaway? Always carefully assess the direction that management intends to take your company. By figuring out the costs and benefits of a given corporate strategy well ahead of Wall Street, you'll put yourself in a prime position to outperform.

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

Here are Friday's biggest one-star decliners:

Company

Friday's % Loss

Probable Catalyst

Krispy Kreme Doughnuts

(15.43%)

N/A

TOUSA

(15.26%)

N/A

Protalix BioTherapeutics (AMEX: PLX  )

(13.66%)

N/A

Xinhua Finance Media Limited

(10.41%)

N/A

Midway Games (NYSE: MWY  )

(9.73%)

N/A

Did CAPS call the fall?
One-star stocks inspire the least confidence from our CAPS community. By investigating a few of the bearish arguments made for these losers, we'll have a better chance of averting portfolio disaster in the future.

Take, for instance, this Midway Games underperform pitch found in CAPS:   

Midway was a strong company with Mortal Kombat and ... well ... that was their ace. However, after it's been used you better have more than just an ace up your sleeve to service in this industry. And that's what they need. Something fresh and exciting instead of sticking to just once franchise.

The Chicago-based video game publisher is down 40% since CAPS All-Star vittorio301 penned that pitch last December.

The bearish lesson? Never invest in "one-hit wonders." By sticking to companies with a potent pipeline, a solid track record of innovative success, and market-leading positions, not only will you decrease your chances of loss, you'll also have a better shot at those multibagger gains.

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!


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