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 120,000 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.


All-Stars Saying Outperform


102 of 106

Textainer Group (NYSE:TGH)

109 of 113

Encore Wire (NASDAQ:WIRE)

347 of 372

Fairfax Financial Holdings Limited (USA) (NYSE:FFH)

346 of 369

Votorantim Celulose e Papel S.A (ADR) (NYSE:VCP)

202 of 209

Alumina Limited (ADR) (NYSE:AWC)

106 of 113

iShares Dow Jones US Energy Sector (ETF) (NYSE:IYE)

161 of 166

Data from Motley Fool CAPS, Jan. 2, 2009.

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