Thursday's Biggest Stock Stars

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 a top rating of five stars.

Without further ado:

There's a reason why I selected notable five-star gainers, as opposed to other big-name winners making noise on Thursday, like low-rated Sprint Nextel (NYSE:S). Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 125,000 CAPS Fools considers its five-star stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 98% of the 364 members who've rated Hornbeck Offshore, a supplier of offshore supply vessels to the energy industry, have a bullish opinion of the stock. Last month, in a reply to a fellow Fool, PawPawFestus shared some unique insights into the company:

I've worked with this company before and hope to again. They're sharp, hire the best people and they are all bidness, friendly and helpful. The capts and crews are top notch. The equipment is the best on earth. Management? They don't come no better. Vision? Todd Hornbeck can see through time. The man is a genius.

Consistent with that call, shares of Hornbeck surged yesterday, after the company posted quarterly revenue growth of 20% and profit growth of 36%, on strong demand for its new-generation vessels.

The bullish lesson?
Always stay within your circle of competence. As CAPS' PawPawFestus understands, one of the easiest ways to gain an edge on Wall Street is by sticking to sectors that you're already familiar with. As value guru Mohnish Pabrai said in a recent interview, "Most people, if they really think about it, have a business or an industry or two that they understand very well. ... People get into trouble when they work in a bank and they want to invest in Google."

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

While yesterday's plunge in highly rated Excel Maritime (NYSE:EXM) may have caught our community off-guard, one-star stocks are fully expected to fall hard.

Did CAPS call the fall?
In late December, for instance, CAPS All-Star uclayoda87 shared this bearish prediction on Capital One: "Major credit card defaults to begin in 2009. Rising unemployment and limited HELOC to borrow from will cause multiple problems for banks and credit card companies."

With the help of yesterday's drop, shares of the credit card company are down 69% since that call.

The bearish takeaway?
Always identify a stock's risk exposures before they come back to haunt you. One of the most common mistakes we can make as investors is failing to see the nasty things that lurk just around the corner. Unless you're willing to consider all of the possible ways your stock might get killed -- both in the short and the long run -- there's a good chance you'll wake up one day and get blindsided.

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!