5-Star Stocks on the Upswing

Sadly, there's no such thing as an ultimate buy signal when it comes to investing in stocks. Identifying companies with the wind at their back takes time, patience, and a good dose of due diligence.

There is, however, an easy way to increase your odds of finding the stocks that will beat the market. At Motley Fool CAPS, the Fool's investing community of more than 120,000 members, we've found that five-star stocks, as a group, substantially outperform the broader market -- to the tune of 12 percentage points on an annualized basis from November 2006 to July 2008.

To fully capture the upside potential of those five-star stocks, it makes sense to identify them just as soon as they achieve five-star status. Fortunately, our CAPS screener now makes it possible to do this. Below, for example, is a list of companies that have been upgraded to five-star status from four stars just yesterday. These stock ideas are only a starting point, of course. Be sure to join us on CAPS to dig in even further.

Company	All-Stars Saying Outperform
AES (NYSE: AES)	327 of 350
SPDR S&P Metals and Mining (ETF) (AMEX: XME)	267 of 273
Daktronics (Nasdaq: DAKT)	386 of 417
Allied Waste Industries (NYSE: AW)	212 of 225
3SBio (ADR)  (Nasdaq: SSRX)	400 of 415
DuPont (NYSE: DD)	1,140 of 1,209
Knight Capital Group (Nasdaq: NITE)	213 of 223

Data from Motley Fool CAPS, Oct. 24, 2008.

Come and join us on CAPS, absolutely free, to learn more about these and countless other interesting stock ideas.