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

Without further ado:


Yesterday's % Gain

Matrixx Initiatives


Embotelladora Andina


BorgWarner (NYSE: BWA)


CommVault Systems


Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B)


There's a simple reason I selected the largest five-star gainers, as opposed to other big-name winners making noise on Thursday, like one-star stock WCI Communities (NYSE: WCI). Stocks go up all the time, but unless you were able to predict the pop, what does it matter?

Our community of more than 81,000 CAPS Fools considers its five-star stocks the most likely to outperform the market. And so far, CAPS has indeed proved its market-beating prowess: Over the past year, top-rated stocks have returned roughly 28%.

Written in the (five) stars?
For example, 93% of the 178 CAPS players who've voted on BorgWarner so far have given the stock an outperform rating. And of the 49 CAPS All-Stars who've rated the Michigan-based auto supplier, not one is bearish.  

This outperform pitch -- by CAPS player etalian in October of 2006 -- highlighted the company's enticing global growth prospects: "The engine group stands to benefit from a global shift toward stricter emission standards as well as continued growth of diesel engines (primarily Europe & Asian markets). The drivetrain group stands to benefit from the need for greater fuel efficiency and the growth of automatic transmission system cars in a primarily manual transmission market (again Europe & Asia)."

BorgWarner is up an outstanding 52% since that call. In fact, yesterday's pop came after management said it expects to meet or beat Wall Street's profit forecasts for 2008, fueled primarily by the growth of its European and Asian operations -- exactly as CAPS' etalian had pitched more than a year ago.

The bullish takeaway? There are lots of ways to get around the globe. If you're weary of the unique risks of foreign investing, buying into U.S.-based companies that derive a good chunk of sales overseas can be a great way to gain international exposure. And with all the turmoil in today's domestic markets, it's probably not a bad idea to keep at least a portion of your portfolio outside the U.S.

And now for the losers ...
Of course, winning isn't everything in the stock market. Here are Thursday's biggest one-star decliners.


Yesterday's % Loss

Ambac Financial Group (NYSE: ABK)




Radian Group


Virgin Mobile


Raser Technologies


One-star stocks inspire the least confidence from our CAPS players. So while yesterday's drop in five-star stock Perini (NYSE: PCR) may have caught our community off-guard, one-star stocks are fully expected to fall hard. Over the past year, CAPS' lowest-rated stocks dropped an average of 16.6%.

Did CAPS call the fall?
Take, for instance, this Ambac Financial/MBIA bear call -- by CAPS All-Star abitarecatania -- about one month ago, quoting from another source:

My Comment: Insurance from MBIA and Ambac is worthless. Neither Ambac nor MBIA come remotely close to deserving AAA ratings. Everyone knows it, but Moody's, Fitch, and the S&P all pretend otherwise.

As if in direct response to that comment, Moody's Investor Service finally warned yesterday that it had placed the "AAA" ratings of both Ambac and MBIA on review for a possible downgrade. Judging from the market's response, a downgrade would likely be the last nail in the coffin for the two battered bond insurers.

The bearish lesson? Always trust your own eyes above all else. If you're convinced that a company is an undercapitalized house of cards, it's probably best to stay away, whatever the ratings agencies -- or other respected investors -- believe. With billions of dollars worth of CDOs, closed-end mortgages, home equity lines of credit, and other debt exposures on the bond insurers' books, many observers feel it's just a matter of time before most of these companies cease to exist.

The final Foolish move
Investors often focus strictly on stock price movements (or the results), 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!

Berkshire and Moody's are both recommendations of Inside Value and Stock Advisor. BorgWarner is also a Stock Advisor pick. Embotelladora is a Global Gains selection. The Motley Fool owns shares of Berkshire.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy is always the big winner.