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

Without further ado:

Company

Yesterday's Gain

Rex Energy

14.76%

Immersion (Nasdaq: IMMR)

12.00%

Denison Mines (AMEX: DNN)

10.41%

GrafTech International (NYSE: GTI)

9.49%

Aircastle (NYSE: AYR)

9.18%

There's a simple reason why I selected the largest five-star gainers, as opposed to other big-name winners making noise on Monday, like three-star stock Take-Two Interactive (Nasdaq: TTWO). Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 84,000 CAPS Fools considers its five-star stocks the most likely to outperform the market. And so far, CAPS has indeed proven its market-beating prowess: Over the last year, top-rated stocks have returned roughly 28%.

Written in the (five) stars?
For example, out of the 622 players who've rated Motley Fool Rule Breakers pick Immersion, a whopping 98% are bullish. Fueled by that huge Foolish support, the small-cap developer and licensor of haptics (touch feedback technology) has kept a five-star rating for over four months straight.

Two weeks ago, CAPS investor FutureMonkey penned this touching outperform case for our community:

Touch screens have been around for a long time. They are becoming ubiquitous in nearly every aspect of professional and personal lives. Airport check in, ATMs, grocery stores, medical devices. How about kitchen appliances? Videogames? And now, imagine placement in every new car, home computer, laptop, and cell phone.

With the help of yesterday's double-digit pop, Immersion is beating the market since that call.

The bullish takeaway?
Not all technologies are "pie in the sky" long shots. Even the most ardent value investors know the benefit of buying pioneering small caps with real, tangible, consumer-facing innovations. As long as you thoroughly understand the business model and can estimate its market potential within reason, investing in familiar technologies can be a great way to beat the street.

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

Here are Monday's biggest one-star decliners:  

Company

Yesterday's Loss

Cott Corp.

18.35%

Salary.com (Nasdaq: SLRY)

7.25%

Aventine Renewable Energy Holdings

6.05%

Vanda Pharmaceuticals

5.67%

FiberTower

4.73%

One-star stocks inspire the least confidence from our CAPS players. So while yesterday's drop in highly rated Suntech Power Holdings (NYSE: STP) may have caught our community off guard, one-star stocks are fully expected to fall hard. Over the last year, CAPS' lowest-rated stocks dropped an average of 16.6%.

Did CAPS call the fall?
Back in late April, for instance, CAPS All-Star metaphorical shared these bearish musings on Salary.com:

A well-known place for salary data, yet remains a complex and uninspiring website despite years of development. They have little moat against new and cleverer Web 2.0 startups such as payscale.com.

Shares of the compensation management solutions provider are down 34% since that call.

The bearish lesson?
Never underestimate the protection that a strong competitive edge provides. Without a meaningful advantage, businesses are constantly exposed to the ravages of competition -- especially if the industry has low barriers to start with. As Warren Buffett says, "The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage."

The final Foolish move
Investors often focus strictly on stock price movements (or the results), without realizing that developing a proper stock-picking process counts most.

Over at Motley Fool CAPS, tens of 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.

Immersion, Suntech Power, and Take-Two Interactive are recommendations of Motley Fool Rule Breakers. Take a look at what other companies the newsletter has picked as pioneers in their respective fields with a 30-day free trial.

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