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:


Yesterday's Gain



Freeport-McMoRan (NYSE:FCX)


Halliburton (NYSE:HAL)


Akamai Tech (NASDAQ:AKAM)


Schlumberger (NYSE:SLB)


There's a reason I selected those notable gainers, as opposed to other winners making noise on Wednesday, like one-star stock Vonage (NYSE:VG): 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 424 members who've rated Motley Fool Rule Breakers pick 3SBio have a bullish opinion of the stock. In December, one of those Fools, pedrokoz, tapped the Chinese biotech as a great way to get big bang for your buck:

From a growth perspective it is VERY cheap. Management seems to have a better track on managing in an economy and market that most do not understand and have dome a remarkable job in growing it conservatively to date -- a sign of good management. ... Stock looks like an easy double from these levels near term as the market regains its feet.

Following yesterday's pop, shares of 3SBio are indeed up an impressive 95% since that call.

The bullish lesson?
Learn to combine the best of both value and growth investing worlds. By seeking rapidly growing companies at cheap prices, you not only buy into a stock trading below its fair value today, but also own a business that can increase that value tomorrow. As Warren Buffett reminds us, "Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher five, 10, and 20 years from now."

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:   


Yesterday's Loss

Standard Pacific


Avis Budget Group (NYSE:CAR)


PMI Group




Pulte Homes


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

Did CAPS call the fall?
Two weeks ago, for instance, CAPS All-Star jkhax0r warned Fools to steer clear of Avis:

The second the economy gets a scare or things start to level off from the current bubble (Sept 09), investors will start exiting when they realize how overpriced this is. ... [I]t seems this stock is already priced for another kick-a** earnings report, so if it is positive, I suspect little movement and not much lost. If negative, will result in massive correction.

Consistent with that bearish call, shares of the car rental company sank yesterday after warning that warrants related to a recent $250 million debt offering could impact earnings.

The bearish takeaway?
Built into a stock's price are very specific growth and risk assumptions. Therefore, it's your job as an investor to assess whether those expectations are reasonable, given the company's financial and competitive picture. As Buffett cautions, "Investors making purchases in an overheated [stock] need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid."

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. Akamai and 3SBio are Rule Breakers picks. The Fool's disclosure policy is always the big winner.