Monday'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' 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 gainers among the stocks with a top rating of five stars. Also, I've 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 volume leaders -- like Time Warner (NYSE: TWX) and CVS Caremark (NYSE: CVS) -- is simple: Stocks go up all the time, but unless you were able 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, Golar LNG, a Bermuda-based shipper of liquefied natural gas (LNG), has had always had overwhelming support from our community, maintaining a five-star rating for the past six months straight.

This outperform pitch -- pulled from Golar's CAPS page -- gives us an idea why:

More liquefied natural gas will be shifted in coming years. GLNG has to compete with major oil companies like Shell. And at present, it has an overcapacity in shipping (bad short term, very good long term). New ships are being built at the competitors, but new shipyard costs are far higher. GLNG already has its ships.

Since CAPS player malcolmcochran made that call in December of 2006, GLNG has returned a sweet 99% -- in addition to having paid out $2.25/share in dividends.

The bullish takeaway? There are plenty of paths to market-trouncing heaven. But purchasing solid, dividend-paying stocks with massive growth opportunities could very well be the safest way there.

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

Here are yesterday's biggest one-star decliners:

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 Mothers Work underperform pitch found in CAPS:

This company struggles from poor management that is only able to grow through acquisition, and they've already bought up everybody they can. The competitors left are mostly Wal-Mart (NYSE: WMT) and Target (NYSE: TGT). Management bailed on the stock [sold] last November. Won't outperform until they come up with a business strategy that will work.

The Philadelphia-based retailer of maternity apparel is down 30% since CAPS participant germo penned that pitch last July, and off a stomach-churning 65% year over year.

The bearish lesson? Always keep an eye on the insiders. Although it's true insiders may sell stock for a wide variety of reasons, it's certainly worth a closer look if they start unloading in massive amounts -- especially if the company has to compete with 800-lb. gorillas to begin with.

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!