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



Sterlite Industries


Yingli Green Energy






There's a reason I selected those notable gainers as opposed to other winners making noise on Tuesday, like low-rated AMD (NYSE:AMD): 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% of the 376 All-Star members who've rated JA Solar have a bullish opinion of the stock. In February, one of those top Fools, SIP08ISU, explained why the Chinese solar cell maker would soon have its day in the sun: "Although this company has had to cut its projected 2009 earnings ... this stock will outperform the market in years to come. solar energy is becoming more and more important, which is going to place an emphasis on companies such as this one."

JA Solar is up an impressive 64% since that call. In fact, shares of several highly rated solar stocks surged yesterday after Trina Solar CFO Terry Wang said the industry's worst days are finally behind it.

The bullish lesson?
Learn to pounce on Mr. Market's shortsightedness. Going against the herd is never easy, but if you truly believe in a company's long-term tailwinds, significant slowdowns offer the very best time to buy. As Warren Buffett quips, "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."

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



Fannie Mae


Freddie Mac


Citigroup (NYSE:C)


Moody's (NYSE:MCO)


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

Did CAPS call the fall?
Just two weeks ago, for instance, CAPS All-Star rijoker explained why AIG was seemingly selling itself short: "The company has huge debts especially to the govt; still having to sell off large portions of the company to stay afloat and return to continuous profits are still way out on the horizon. There will not be profits in the next few quarters as AIG has even stated they will not have continuous profits."

Consistent with that warning, shares of the embattled insurance giant fell more than 10% yesterday after a Wall Street analyst downgraded the stock on worries that asset sales to repay the government will ultimately leave common shareholders little to no value.

The bearish takeaway?
Never bet on a stock simply because it was bailed out. As CAPS' rijoker understands, massive assistance from the government doesn't necessarily mean that common equity holders stand to benefit. Unless you're truly able to discount the huge dilution effects and operating risks that still remain, speculating on "zombie" institutions might end with horrific returns.

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. Moody's and UnitedHealth are selections of both Motley Fool Stock Advisor and Inside Value. Sterlite Industries is a Global Gains selection. The Fool owns shares of UnitedHealth. The Fool's disclosure policy is always the big winner.