Hey there, Fools. I've summoned our Motley Fool CAPS community once again to highlight a few of Thursday's biggest winners among the stocks with top ratings of four or five stars.

Without further ado:


Yesterday's % Gain

Allied Irish Banks (NYSE:AIB)


Allegheny Technologies


Royal Bank of Canada (NYSE:RY)


Titanium Metals (NYSE:TIE)


Nokia (NYSE:NOK)


There's a reason why I selected those notable gainers as opposed to other winners making noise on Thursday, like low-rated financials AIG and Citigroup (NYSE:C): 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, 97% of the 2,460 members who've rated Allied Irish have a bullish opinion of the stock. In late July, one of those Fools, WPThatcher, explained why the embattled bank was a good way to go green:

Allied Irish Banks is one of the big boys of Irish banking. … This company got killed in the last year, losing about 80% of its value. … The bottom line is that this is a speculative pick in the short-term, but long-term, unless you think that the Irish growth story is dead, should pay off handsomely for the patient investor.

Following yesterday's double-digit pop, Allied Irish is already up 55% over the last month.

The bullish lesson?
Learn to be long-term greedy when others are short-term fearful. Going against the herd is never easy, but if you truly believe in a company's long-run potential, major downturns can offer the very best buying opportunities. As Warren Buffett reminds us: "Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices."

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

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


Yesterday's % Loss

Human Genome Sciences


Avis Budget Group (NYSE:CAR)


Borders Group






While yesterday's plunge in five-star stock Sigma Designs 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 All-Star mrindependent warned Fools to steer away from Avis' high-speed price:

I cannot create a case that justifies this company's current price. Avis is a perpetual money loser with huge amounts of debt. In liquidation, the company is worth zero. If the company continues to operate, it is worth even less.

After yesterday's drop, shares of the car rental company are already down 14% since that bear call.

The bearish takeaway?
Implicit in a company's stock price are very specific cash-flow assumptions. Therefore, one of the most important jobs you have as investor is to determine whether those assumptions are justified. As CAPS' mrindependent understands, any company can pop in the short term, but if those expectations aren't rooted in economic reality, it's just a matter of time before your rocket stock turns torpedo.

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. Allied Irish is a Motley Fool Global Gains pick, Nokia is an Inside Value choice, Titanium Metals is a selection of Stock Advisor, and Sigma Designs is a Rule Breakers recommendation. The Fool owns shares of Allied Irish. The Fool's disclosure policy is always the big winner.