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 top ratings of four or five stars:

There's a reason I selected those notable gainers, as opposed to other winners making noise on Thursday, like one-star stock AIG (NYSE:AIG): Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 140,000 CAPS Fools considers its high-star stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 95.8% of the 3,446 members who've rated Motley Fool Stock Advisor selection Costco have a bullish opinion of the stock. Just two weeks ago, one of those Fools, tpc2104, explained why the wholesale retail giant looked like a bulky bargain:

Strong management and balance sheet. Good sales. Great business model. Like others have said, low employee turnover, warehouses always packed with customers, new warehouses always opening. Decent dividend, which I suspect will only increase as Costco's business thrives.

Shares of Costco are already up 15% since that call. In fact, yesterday's pop came after the company's same-store sales for August easily topped Wall Street estimates.

The bullish lesson?
Learn to profit from your surroundings. As CAPS' tpc2104 understands, there's no better way to gain an edge on Wall Street than paying attention to the rock-solid stalwarts in our own everyday lives. As Peter Lynch reminds us, "So often we struggle to pick a winning stock, when all the while a winning stock has been struggling to pick us."

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

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

While yesterday's drop in highly rated U.S. Natural Gas Fund (NYSE:UNG) may have caught our community off guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
Last year, for instance, CAPS member aquapicap followed the lead of stock whistleblower Citron Research and looked into Amedisys:

It is currently being bid back up for whatever reason. I did further research and found out that not one, but two CFOs have left this company in the last 3 years. ... That always raises a red flag in my book.

Not surprisingly, shares of the home nursing provider are down 40% since that call. In fact, yesterday's 21% tumble came after yet another pair of key executives, the COO and CIO, announced their resignation effective immediately -- consistent with aquapicap's warning.

The bearish takeaway?
High management turnover doesn't always spell trouble, but it's an alarm bell that Fools should take seriously. Executives, after all, know the company better than anyone else, so when they're departing at a rapid rate, it might just be a sign of serious underlying problems. Compared to all of the companies offering long-term manager/owners to invest alongside, putting your trust in a "revolving door" doesn't seem worth it.

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 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!