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.

Without further ado:


Yesterday's % Gain

International Coal (NYSE:ICO)


Massey Energy (NYSE:MEE)


Cemex (NYSE:CX)


Yanzhou Coal Mining


Apollo Investment (NASDAQ:AINV)


There's a reason why I selected those notable gainers as opposed to other winners making noise on Monday, like low-rated banks SunTrust (NYSE:STI) and Fifth Third. 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, 94% of the 670 members who've rated Massey Energy have a bullish opinion of the stock. In late March, one of those Fools, Isis3, explained why the coal producer's upside looked too good to pass up:

I know investors have placed the coal names in the dungeon for now because they think the Obama administration wants to stop using coal altogether. This is ludicrous. … China's appetite for coal will be insatiable. … There are hundreds of millions of people trying to join the middle class in China, India, Africa, and elsewhere. The number one demand of that group is for electricity and most of that electricity will be generated by coal.

Massey is already up over 80% since that call. In fact, shares of several coal stocks surged yesterday after a Wall Street analyst upgraded the sector on expectations that prices will stabilize and economic growth in China will boost demand.

The bullish lesson?
When the stock of a company you like takes a beating, always try to figure out why. If Mr. Market's punishment seems to make no sense, given the sector's real demand profile, it might be the perfect time to jump in. As Warren Buffett recently wrote, "When investing, pessimism is your friend, euphoria the enemy."

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

BioCryst Pharmaceuticals (NASDAQ:BCRX)


Tuesday Morning


American Apparel




Washington Post Co.


While Monday's drop in highly-rated Adobe Systems (NASDAQ:ADBE) may have caught our community off-guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
Last week, for instance, CAPS member clutedog seemed skeptical over BioCryst's swine scare-driven price surge:

Swine flu? Are you kidding me? This will blow over and these companies will have produced enough product for billions of people who are all perfectly healthy. Thanks, 24-hour news cycle, for making a mountain out of a molehill...

Shares of the flu treatment maker are already down 21% since that call. In fact, yesterday's plunge came after the Mexican government announced on Sunday that the worst of the flu outbreak had passed.

The bearish takeaway?
Never confuse an improving stock price for improving fundamentals. As long as a company continues to burn cash, while its profits are spoken of in terms of potential, then short-term, emotionally-charged, news-driven run-ups can only be sustained for so long. As Benjamin Graham famously said, "In the short run, the market is a voting machine, but in the long run it is a weighing machine."

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! 

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Cemex is a Motley Fool Stock Advisor and a Global Gains selection. The Fool owns shares of Cemex. The Fool's disclosure policy is always the big winner.