4-Star Stocks on the Upswing

• Email
• Share
• Print

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 backs 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 130,000 members, we've found that four- and five-star stocks, as a group, have outperformed the broader market -- to the tune of seven and 12 percentage points, respectively -- on an annualized basis from November 2006 to July 2008.

To fully capture the upside potential of those highly rated stocks, it makes sense to identify them just as soon as they are upgraded to four- and 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 four-star status from three 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
NovaGold Resources, Inc. (USA) (AMEX: NG)	563 of 605
Legg Mason, Inc. (NYSE: LM)	970 of 1054
International Game Technology (NYSE: IGT)	611 of 657
Amtrust Financial Services, Inc. (Nasdaq: AFSI)	256 of 268
Innophos Holdings, Inc. (Nasdaq: IPHS)	392 of 420
Esterline Technologies Corp (NYSE: ESL)	115 of 124

Data from Motley Fool CAPS, March 17, 2009.

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