5-Star Stocks on the Upswing

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.

However, there is an easy way to increase your odds of finding the stocks that will beat the market. At Motley Fool CAPS, the Fool's 110,000-plus-member investing community, 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 early November 2006 to early July 2008.

In order to fully capture the upside potential of those five-star stocks, it makes sense to identify them as soon as they achieve five-star status. Fortunately, our CAPS screener now makes it possible to do so. Below, for example, is a list of companies that have recently been upgraded to five-star status. These stock ideas are only a starting point, of course. Be sure to join us on CAPS to dig in even further.

Data from Motley Fool CAPS, July 31, 2008.

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