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 top ratings of four or five stars:


Yesterday's Gain

Cal-Maine Foods (NASDAQ:CALM)


American Science & Engineering (NASDAQ:ASEI)


United States Natural Gas (NYSE:UNG)


CF Industries


American Eagle Outfitters (NYSE:AEO)


There's a reason I selected those notable gainers, as opposed to other winners making noise on Monday, 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, 97% of the 214 All-Star members who've rated Cal-Maine have a bullish opinion of the stock. This past summer, one of those top Fools, mpendragon, brought the stock's eggs-cellent fundamentals to our community's attention:

This company has had a lot of growth, good margins, a realistic P/E, they are in an industry that's resilient to economic problems, and doesn't have much international competition. My main reservations about this company have to do with future fuel and grain costs issues.

Shares of the egg producer are up 33% since that call. In fact, yesterday's pop came after the company's second-quarter profit slipped 41% and still managed to top expectations -- consistent with mpendragon's bargain-based reasoning.

The bullish lesson?
Always be on the hunt for stocks priced for imperfection. It's virtually impossible to call a stock's "bottom," but if you're confident that the risks are already baked into the price, there's a good chance your investment will turn out well over time. As Warren Buffett reminds us, "Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."

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

Here are five of Monday's biggest decliners with one- or two-star ratings:   


Yesterday's Loss

US Airways Group (NYSE:LCC)






Delta Air Lines


Continental Airlines


While yesterday's plunge in five-star stock CapitalSource may have caught our community off guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
One year ago, for instance, All-Star epmccart warned Fools about riding any of the legacy airliners:

Besides the laundry list for not investing in airlines at all (umm, let's see: oil money, less spending money in a recession, huge overhead costs, terrorism fears, etc...), the big airlines -- Continental , [United Airlines], Delta, and the like -- have been dragging for years. And now they have fresh competition even WITHIN the industry.

Consistent with that warning, shares of several airline stocks dove sharply yesterday on heightened travel fears stemming from the Christmas Day terrorist attempt on a Northwest Airlines flight.

The bearish takeaway?
Always identify a stock's risk exposures before they come back to haunt you. One of the most common mistakes we can make as investors is failing to see the dangerous things that lurk just around the corner. Unless you're willing to consider all of the possible ways your stock might get killed -- both in the short and the long run -- there's a good chance you'll wake up one day and get blindsided.

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 retire wealthy.

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. American Science is a Motley Fool Rule Breakers pick. The Fool owns shares of CapitalSource and has an options position on U.S. Natural Gas. The Fool's disclosure policy is always the big winner.