Monday's Biggest Stock Stars

Hey there, Fools. I've summoned our Motley Fool CAPS community once again to highlight a few of Monday's biggest winners among the stocks with top ratings of four or five stars.

Without further ado:

There's a reason why I selected those notable gainers as opposed to other winners making noise on Monday, like low-rated financial Huntington Bancshares. Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 135,000 CAPS Fools considers its "high-star" stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 97% of the 2,515 members who've rated Netgear have a bullish opinion of the stock. In February, one of those Fools, oneilldp, helped our community stay connected to the Wi-Fi router maker:

This company makes good products and has a lot of cash to survive the down turn. … The company has good management and is conservative, which will benefit them in a year or two when demand picks up and many competitors go out of business. Sales may stay down for a while, but they will pick up eventually and [Netgear] will gain market share and increase profit margins.

After yesterday's bump, Netgear is up an impressive 45% since that call.

The bullish lesson?
When searching for value in a recession, "good" is almost never enough. As CAPS' oneilldp understands, the key to capitalizing on downturns is buying into well-managed, cash-rich, best-of-breed businesses that stand to benefit from any industry shakeout (by growing market share at the expense of weaker competitors). Many times, we can get away with second-rate stocks, but when things get rough, it's crucial to stick only with the best.

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

Here are five of Monday's biggest decliners with one- or two-star ratings:   

While yesterday's drop in five-star stock AgFeed may have caught our community off-guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
Just last week, for instance, CAPS All-Star mrindependent threw the bearish book at Borders Group:

Besides contending with internet sales of books and music and low consumer spending, the company must also contend with the rapid rise of Amazon's (NASDAQ:AMZN) Kindle. I suspect electronic books will eventually enjoy a 50% market share. Borders is not positioned to benefit from this trend. This stock is way ahead of itself as its rally from $0.34 to $4.22 seems excessive.

After yesterday's double-digit drop, shares of the book retailer are already down 21% since that call.

The bearish takeaway?
Always make sure the (business) trend is your friend. For market-beating returns, it's crucial that you position your portfolio to take advantage of massive shifts in commerce, rather than struggle against where the world is headed. In Wayne Gretzky's words, "Skate to where the puck is going, not to where it's been."

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!