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 125,000 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
CTC Media, Inc. (Nasdaq: CTCM)	150 of 158
Danaos Corp (NYSE: DAC)	243 of 255
Haynes International, Inc. (Nasdaq: HAYN)	191 of 203
Somanetics Corp (Nasdaq: SMTS)	205 of 215
iShares MSCI Australia Index Fund (ETF) (NYSE: EWA)	464 of 475

Data from Motley Fool CAPS, Jan. 30, 2009.

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