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 a top rating of five stars.

Without further ado:

There's a reason why I selected notable five-star gainers, as opposed to other big-name winners making noise on Monday, like one-star stock Fifth Third Bancorp (NASDAQ:FITB). Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 125,000 CAPS Fools considers its five-star stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 97% of the 433 members who've rated GeoEye have a bullish opinion of the stock. Last month, one of those Fools, Wraithlok, listed five reasons why Fools should stay on top of the satellite imagery company. Here are the first and last:

1) They have a lock on the best satellite tech currently available because of export restrictions regarding imagery tech that prevents them from exporting it. That means less competition …

5) They just signed a LONG term contract with Google (NASDAQ:GOOG) Earth for [GeoEye-1] imaging, and they are looking at signing another LONG term contract with the US government as a subcontractor for all of their imaging needs.

What is not to like?

Consistent with that call, shares of the company surged yesterday after its GeoEye-1 satellite did indeed receive full operational capability certification.

The bullish lesson?
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 at bargain prices. 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 five of Monday's biggest one-star decliners:   

While yesterday's plunge in five-star stock UnitedHealth Group (NYSE:UNH) may have caught our community off-guard, one-star stocks are fully expected to fall hard.

Did CAPS call the fall?
Last week, for instance, CAPS member prettyricky helped explain all the noise surrounding UBS:

This is a swiss bank that has lost a battle with the us government. part of the deal they made was to give up names and info of all of their American customers. In which the American government believes they have been evading paying taxes. So my gut tells me that their about to lose a lot of customers; which means business; which means LOOK OUT BELOW!

In line with that pitch, shares of the Swiss bank sank yesterday on investor disapproval over the way it has been dealing with the U.S. tax probe.

The bearish takeaway?
As CAPS' prettyricky illustrated, it’s important to pay attention to risk -- in totality. One of the biggest mistakes we make as investors is failing to consider second, third, and higher-order effects when analyzing a company's risk exposures. As Charlie Munger once wrote, "This defect is quite understandable, because the consequences have consequences, and the consequences of the consequences have consequences, and so on."

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!