Hey there, Fools. I've summoned our Motley Fool CAPS community once again to highlight a few of Thursday's biggest winners among the stocks with top ratings of four or five stars.
Without further ado:
|
Company
|
Yesterday's % Gain
|
|
Dow Chemical (NYSE: DOW )
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18.43%
|
|
JA Solar Holdings (Nasdaq: JASO )
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14.33%
|
|
Akamai Tech (Nasdaq: AKAM )
|
9.77%
|
|
Manitowoc
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7.99%
|
|
Caterpillar (NYSE: CAT )
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5.61%
|
There's a reason why I selected those notable gainers, as opposed to other winners making noise on Thursday, like low-rated MGM Mirage (NYSE: MGM ) . Stocks go up all the time, but unless you were able to predict the pop, what does it matter?
Our community of more than 130,000 CAPS Fools considers its "high-star" stocks the most likely to outperform the market.
Written in the (five) stars?
For example, 97% of the 823 All-Star members who've rated Dow Chemical have a bullish opinion of the stock. In early March, one of those All-Star Fools, Babachrono, explained why the chemical giant would eventually recover from its buyout blues:
Yes the market is down...Dow is a world leader and will pop back up once the market turns as will the rest. They also need to figure out the [Rohm & Haas] acquisition piece...taking on that much debt at this time would be rough and look terrible because they definitely don't have the cash on hand to cover.
Dow is already up more than 129% since that call. In fact, yesterday's pop came after the company posted a surprise quarterly profit, and announced $25 billion in divestures to help pay for the Rohm & Haas deal -- consistent with Babachrono's analysis.
The bullish lesson?
Learn to embrace the bargains that only bad news can provide. As CAPS' Seasonfire understands, industry champions often move higher well before the economy or sentiment turn, so it's important to jump in while there's still blood in the streets. As Warren Buffett reminds us, "[I]f you wait for the robins, spring will be over."
And now for the losers ...
Of course, winning isn't everything in the stock market. Here are five of Thursday's biggest decliners with one- or two-star ratings:
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Company
|
Yesterday's % Loss
|
|
Eastman Kodak (NYSE: EK )
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16.21%
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Ryland Group
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13.85%
|
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Beazer Homes
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10.95%
|
|
Dendreon
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7.59%
|
|
Motorola (NYSE: MOT )
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7.21%
|
While yesterday's drop in highly rated company Oshkosh may have caught our community off-guard, low-ranked stocks are fully expected to fall hard.
Did CAPS call the fall?
In late March, for instance, CAPS member Option1307 snapped a not-so-pretty picture of Eastman Kodak. Here's an excerpt:
When was the last time you had camera film developed? Ya, that's what I thought. And for those < 20 yrs. old, you have likely never experienced that old school way of technology. We live in a digital world and things are only rapidly accelerating farther down that [path]. Traditional photography is dead.
Consistent with that call, shares of the photography pioneer plunged yesterday, after Kodak suspended its dividend and saw its quarterly loss widen to $353 million.
The bearish takeaway?
Always make sure that the megatrends are your friends. For market-beating returns, it's crucial that you position your portfolio to take advantage of massive shifts in commerce, rather than struggling against where the world is headed. As Option1307 understands, buying into "buggy whips" disguised as bargains is one of the easiest ways to crash your portfolio.
The final Foolish move
Investors often focus strictly on stock price movements, 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, above all else, 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 and start participating. It's absolutely free -- and a lot of fun!
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