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 four or five stars.

Without further ado:

There's a reason why I selected those notable gainers, as opposed to other winners making noise on Monday, like one-star stock General Motors (NYSE:GM). Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 130,000 CAPS Fools considers its "high-star" stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 96% of the 478 members who've rated General Steel have a bullish opinion of the stock. In November, one of those Fools, milkyway760, explained why the Chinese small-cap seemed like a steal in steel:

The world's fourth-largest economy is still expanding at a healthy rate and is one of few nations that can still afford fiscal pump-priming ... A small cap non government owned STEEL company in a country that just approved a $586 billion stimulus package with concentration on infrastructure.

Consistent with that call, shares of General Steel surged yesterday after the company's preliminary first-quarter results came in well ahead of expectations.

The bullish lesson?
Learn to combine the best of both small-cap and global investing strategies. By buying into proven small-caps domiciled in attractive foreign markets, you earn the double benefit of owning a business that has plenty of room to rocket, while getting paid in non-U.S.-denominated cash flows. As long as you're cognizant of price, international small caps offer a great way to play both offense and defense.

And now for the losers ...
Of course, winning isn't everything in the stock market. Here are five of Monday's biggest decliners with a one- or two-star rating:  

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

Did CAPS call the fall?
In December, for instance, CAPS All-Star epmccart urged our community to stay grounded:

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

And if those bearish reasons weren't enough, shares of several airliners plunged yesterday on fresh fears that the recent swine flu outbreak could curtail travel at a time when the global economy is already so weak.

The bearish takeaway?
Always seek to own stocks that have the strength to bounce back from bad news. It would've been impossible to predict the swine scare, but the long-term economics of airliners make it difficult to take advantage of the newly depressed prices. Like Warren Buffett famously said, "Time is the friend of the wonderful business, the enemy of the mediocre."

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!