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


Yesterday's % Gain

Ambassadors Group


Navios Maritime (NYSE:NM)


Atheros Communications (NASDAQ:ATHR)


Emerson Electric (NYSE:EMR)


Markel (NYSE:MKL)


There's a reason why I selected notable five-star gainers, as opposed to other big-name winners making noise on Tuesday, like one-star homebuilders D.R. Horton (NYSE:DHI) and KB Home. Stocks go up all the time, but unless you were able to predict the pop, what does it matter?  

Our community of more than 125,000 CAPS Fools considers its five-star stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 98% of the 1,457 members who've rated Motley Fool Hidden Gems pick Atheros Communications have a bullish opinion of the stock. Last month, one of those Fools, SkinInvest, urged our community to place their chips on the chip maker:

These guys have a bunch of cash, no debt, and lead their segment of the industry. On top of all that they have not yet been discovered by the big guys. When they do, look out! The sky's the limit.

Consistent with that call, shares of Atheros jumped yesterday, after the company's year-end results topped Wall Street's expectations. Its first-quarter outlook was also better than many had feared.

The bullish lesson?
As CAPS' SkinInvest understands, small companies often provide the biggest bargains. Large caps tend to be priced quite efficiently by Wall Street, so when they get beaten down, there's often a pretty good reason for it. If you really want to take advantage of a market downturn, you need to find the bargains that Wall Street habitually misses: small-cap value stocks.

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


Yesterday's % Loss

Colonial Bancgroup


SunTrust Banks (NYSE:STI)


Fifth Third Bancorp


Capital One Financial


Huntington Bancshares


While yesterday's drop in highly rated US Bancorp (NYSE:USB) may have caught our community off guard, one-star stocks are fully expected to fall hard.

Did CAPS call the fall?
In September, for instance, CAPS All-Star optionhater shared this simple bear pitch on SunTrust Banks: "geographical footprint is clobbering its loan portfolio. Its mid-range size creates a high efficiency ratio which will prove difficult to cut in this operating environment."

Not surprisingly, SunTrust is down a whopping 77% since that call. In fact, shares of most regional banks sank yesterday, amid continued worries about mounting loan-related losses.

The bearish takeaway?
In investing, it's far better to keep your head down than keep it up. When things are going well, it's easy to become complacent as an investor, but that's precisely when you need to make sure that the company's risk exposures aren't getting in the way of sustainable growth. Like Warren Buffett says, "You only find out who is swimming naked when the tide goes out."

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. Markel is a Motley Fool Inside Value recommendation, and the Fool owns shares of it. US Bancorp got the nod from Income Investor. The Fool's disclosure policy is always the big winner.