Wednesday's Biggest Stock Stars

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 top ratings of four or five stars:

There's a reason I selected those notable gainers as opposed to other winners making noise on Wednesday, like low-rated Amazon.com (NASDAQ:AMZN): 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, 96.6% of the 1,533 members who've rated Omniture have a bullish opinion of the stock. Just last month, one of those Fools, larchmont1, nicely analyzed the Web analytics software provider:

As the economy slowly recovers companies will expend growth capital cautiously and Omniture's products help them figure out where to best deploy capital. The cost of using Omniture's products is relatively low. Bottom line: Small Cap, high growth at a reasonable price and no debt risk.

Shares of Omniture are already up over 60% since that call. In fact, yesterday's 26% surge came after graphic design software giant Adobe Systems (NASDAQ:ADBE) said it would buy the company for $1.8 billion to expand its customer base -- consistent with larchmont's bull case.

The bullish lesson?
Always think like a business owner. All sorts of noise can depress a stock's price in the short term, but the true investor is able to focus on the factors that really count over time. By buying into well-positioned, cash-rich companies at reasonable prices, you give yourself plenty of "upside" opportunities -- like being bought out by one of the big boys -- to earn an outsized return.

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

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

While yesterday's drop in highly-rated China Green Agriculture may have caught our community off guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
In late July, for instance, the top-ranked player in all of CAPS, UltraLong, showed skepticism over Novavax's flu-fueled price surge:

They have enough cash to last them possibly 13-14 months before they are out...again. 588 times sales...seriously? The [World Health Organization] is creating an absurd panic over nothing. Every near pandemic of the last 20 years has created a biotech bubble which has burst every time.

Consistent with that warning, shares of the small-cap vaccine maker sank yesterday after announcing a secondary stock offering of $10 million.

The bearish takeaway?
Always invest with a healthy dose of skepticism. There are certainly stocks out there that have the "next big thing" in their pipeline, but unless you have exceptional insight in identifying them, there's really no need to take such long-shot bets. As Warren Buffett tells it, "Sound investing can make you very wealthy if you're not in too big of a hurry. And it never makes you poor, which is even better."

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!