Wednesday's Biggest Stock Stars

Hey there, Fools. I've summoned our Motley Fool CAPS community once again to highlight a few of Wednesday's biggest winners among the stocks with a top rating of five stars at the time.

Without further ado:

There's a reason why I selected notable five-star gainers, as opposed to other big-name winners making noise on Wednesday, like low-rated financials Citigroup and Morgan Stanley (NYSE:MS). 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 five-star stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 98% of the 1,681 members who've rated Manitowoc have a bullish opinion of the stock. One week ago, one of those Fools, NightBengal, explained why the heavy-equipment maker looked like a reasonable long-term bet:

margins look good enough to me ... and their forward P/E is abysmal. These may not be optimum times for manufacturing, but tell me this won't be back up to at least 20 when the dust settles ... I'll just add that the industries they're in (infrastructure and foodservice in particular) are going to yo-yo for a while. This is definitely a long-term outlook.

With the help of yesterday's pop, Manitowoc bounced 25% since that call.

The bullish lesson?
Learn to embrace uncertain situations. One of the biggest mistakes investors make is thinking they can wait on the sidelines, and simply jump back in when all uncertainties are resolved. But as Warren Buffett famously said, "The future is never clear, and you pay a very high price in the stock market for a cheery consensus. Uncertainty is actually the friend of the buyer of long-term values."

And now for the losers ...
Of course, winning isn't everything in the stock market.

Here are five of Wednesday's biggest one-star decliners:  

While yesterday's nasty spill in highly rated shipper TBS International (NASDAQ:TBSI) may have caught our community off-guard, one-star stocks are fully expected to fall hard.

Did CAPS call the fall?
Two weeks ago, for instance, CAPS member misterbull described CBL & Associates in a purely bearish manner: "Overleveraged REIT that needs to cut dividends to survive with over 25% of loans that need to be refinanced in 2009."

After yesterday's drop, shares of the shopping mall operator are down some 20% since that pitch.

The bearish takeaway?
Learn to dodge dangerous dividends. A high-yielding stock is always alluring at first glance, but if that company lacks the earning power and financial strength to sustain that dividend, it's only a matter of time before investors get burned. As CAPS' misterbull understands, a juicy-looking dividend is only as good as the business behind it.

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!