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


Yesterday's Gain

Tata Motors (NYSE:TTM)


Silver Standard Resources




Mosaic (NYSE:MOS)




There's a reason I selected those notable gainers, as opposed to other winners making noise on Tuesday, like low-rated 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 145,000 CAPS Fools considers its high-star stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 96.8% of the 2,532 members who've rated Tata Motors have a bullish opinion of the stock. In late August, one of those Fools, xnautis, highlighted the Indian automaker as an ideal all-terrain investment:

I like this company because they now own my favorite car brand, Land Rover. I know, lame reason to buy a stock. But, that's what got me interested. After I did some more digging, I liked what I saw. ... I think it's a good company with a bright future ... and I'll be helping to contribute to [Tata's] bottom line next year when I buy a new Land Rover.

Shares of Tata are up over 30% since that call. In fact, yesterday's double-digit pop came after a Wall Street analyst upgraded the stock on a forecast that Jaguar Land Rover will show a net profit in fiscal 2011 -- consistent with xnautis' outperform pitch.

The bullish lesson?
Don't be afraid to invest in what you know. As xnautis demonstrates, there's no better way to gain an edge on Wall Street than paying attention to the multibaggers lurking in our own everyday lives. In Peter Lynch's words, "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 Tuesday's biggest decliners with one- or two-star ratings:  


Yesterday's Loss

Bon-Ton Stores (NASDAQ:BONT)


Orbitz Worldwide


ITT Educational Services




Human Genome Sciences (NASDAQ:HGSI)


While yesterday's drop in five-star stock A-Power Energy 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 showed a ton of skepticism over Bon-Ton's booming price:

Bon-Ton's stock price is up dramatically without much rationale. ... In the last 5 years, Bon-Ton's best performance was a 46 million profit. Compare that to its debt and reach your own conclusions. Current [price-to-book] ratio is 4.2 and debt/equity ratio is a stratospheric 17.

Following yesterday's market-bucking plunge, mrindependent is off to a strong start with that bearish call.

The bearish takeaway?
Don't be swayed by Wall Street's short-termism. As long as a company's fundamentals continue to frighten you, it's best to stick to your long-term thesis and not become too affected by daily swings of sentiment. As Benjamin Graham famously said, "In the short run, the market is a voting machine, but in the long run, it is a weighing machine."

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!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy is always the big winner.