5-Star Stocks on the Upswing

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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.

In order 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

Korea Electric Power Corp (ADR) (NYSE: KEP)

205 of 211

American Safety Insurance Holdings, Ltd. (NYSE: ASI)

105 of 107

iShares MSCI South Korea Index Fund(ETF) (NYSE: EWY)

282 of 289

Seagate Technology (Nasdaq: STX)

730 of 770

Sinovac Biotech Ltd. (AMEX: SVA)

251 of 262

Interactive Intelligence (Nasdaq: ININ)

390 of 409

Data from Motley Fool CAPS, Oct. 29, 2008.

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Disclosure is important to us here at The Motley Fool. No individual person selected the stocks in this article, so there is no author to disclose an interest in them. Since this article was automatically generated, it is possible that Motley Fool personnel (and even The Motley Fool itself, through our Million Dollar Portfolio, Motley Fool PRO, and Ready Made Millionaire services), have positions in these stocks. We thought you'd like to know that. You can learn more about The Motley Fool’s disclosure policy here.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 29, 2008, at 4:00 PM, FraudASI wrote:

    American Safety Insurance ( ASI ) is a poor choice of investments and is overstated in it's value. They are under Investigation and currently facing many Federal and State Lawsuits. There expose to fraud and filing of false financial statements and misleading information is SOP, they have so many legal issues and their surplus lines are in deep trouble. According to several law firms currently suing them and speaking to other who are preparing to file suits they are facing millions in judgments and civil problems and may very well face some criminal indictments as well. If you have been a victim of ASI please post so we can contact you for legal reasons.

  • Report this Comment On November 05, 2008, at 10:09 PM, manatoc5 wrote:

    The above comment made by "FraudASI" is most likely someone who is shorting the stock. ASI was recently rated "A" by Best

    and has consistently kept that rating. The above review is filled with grammatical errors and even their pick of a screen name would lead you to believe that they have their own agenda. The book value of ASI is approximately $21 per share, and consists of cash, securities, bonds and no real estate. Within the last week two directors have purchased 3,600 of ASI stock in the open market.

    The best analyst on this stock is Dean Evans of KBW and he attends the conference calls of ASI on a regular basis. If you contact KBW they can send you a copy of all of his quarterly reviews of ASI, and you can verify this through Yahoo Finance.

    I believe his current target price on the stock is $18.

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