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 four or five stars.

Without further ado:


Yesterday's Gain

US Bancorp (NYSE:USB)






China Mobile




There's a reason why I selected those notable gainers, as opposed to other winners making noise on Wednesday, like one-star homebuilders Standard Pacific and Hovnanian. 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 "high-star" stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 97% of the 329 All-Star members who've rated CSX have a bullish opinion of the stock. In January, one of those Fools, TSIF, explained why it was time to hop aboard the railroad operator:

P/E of sub-10 is great for a railroad with a 23% Operating Margin. Debt is high, but cash flow is very good. Even in a prolonged recession goods will move, and the rails are the most efficient. If we stay in a recession, fuel should stay economical. If we boom, then increased freight will occur.

Consistent with that call, shares of CSX surged yesterday after it topped Wall Street's first-quarter profit estimates. Cheaper fuel costs helped to offset weak demand -- just as TSIF predicted.

The bullish lesson?
There's really no substitute for knowing a business model cold. As CAPS' TSIF demonstrates, the only way to reasonably predict a company's fortunes is to understand how its sales and input costs interact with various industry and economic variables. Like Warren Buffett once wrote, "Equity Investment Strategy = Evaluate the Business in Its Entirety."

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

Here are five of Wednesday's biggest decliners with a one- or two-star rating:  


Yesterday's Loss

Burger King Holdings (NYSE:BKC)


Ford Motor (NYSE:F)






Amazon.com (NASDAQ:AMZN)


While yesterday's drop in highly rated coal stocks Peabody Energy (NYSE:BTU) and Alpha Natural may have caught our community off guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
In February, for instance, CAPS All-Star greenwave3 shared these bearish thoughts on Burger King:

Growth is slow, and I do not think a recession will encourage people to eat at [Burger King]. If anything, [McDonald's], Wendy's, Taco Bell, and Subway have been out-marketing [Burger King] for a long time, and others generally have better value/low-cost options on their menus.

In line with that warning, shares of Burger King plunged yesterday after the fast-food chain posted disappointing preliminary third-quarter revenue, as traffic fell sharply in March.

The bearish takeaway?
Never invest in the middle-of-the-road. Generally speaking, businesses can gain a competitive advantage by either selling at the lowest price, or by differentiating their product in consumers' minds. As CAPS' greenwave3 understands, if your portfolio is littered with companies caught between a low-cost rock and a high-quality hard place, your returns will likely get squished in the process.

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!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Markel is a Motley Fool Inside Value recommendation, and the Fool owns shares of it. Amazon is a selection of the Fool's Stock Advisor investing service. The Fool's disclosure policy is always the big winner.