Wednesday's Biggest Stock Stars

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

Without further ado:

There's a reason I selected those notable gainers, as opposed to other winners making noise on Wednesday, like low-rated 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 135,000 CAPS Fools considers its "high-star" stocks the most likely to outperform the market.

Written in the (five) stars?
For example, 98.5% of the 277 All-Star members who've rated Bucyrus have a bullish opinion of the stock. In late December, one of those top Fools, BSHumphreyII, singled out the stock as a potent "picks and shovels" choice:

Bucyrus is absurdly cheap right now at less than 6 times earnings. ... I know commodities have crashed, but that doesn't mean every mine in the world is going to close up! Contracts with multi-national mining corporations will keep Bucyrus in business until commodities recover and its customers begin to expand operations again.

Shares of the mining-equipment maker have risen by an impressive 84% since that call. In fact, yesterday's pop came after a Wall Street analyst reiterated his "buy" rating on the stock, on a forecast of rising orders from coal and oil producers -- consistent with BSHumphreyII's bull call.

The bullish lesson?
Learn to pick up attractive babies when they get thrown out with the bathwater. When times get scary, investors tend to sell stocks haphazardly based simply on the sector they belong to, rather than looking at companies on a case-by-case basis. But as Warren Buffett says, "We want to do business in such an environment, not because we like pessimism but because we like the prices it produces."

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

Here are five of Wednesday's biggest decliners with a one- or two-star rating:  

While yesterday's plunge in highly rated JA Solar (NASDAQ:JASO) may have caught our community off-guard, low-ranked stocks are fully expected to fall hard.

Did CAPS call the fall?
Two weeks ago, for instance, CAPS member VegasMartin warned of Palm's seemingly Pre-mature price run:

Palm cannot compete with Apple (NASDAQ:AAPL) and Blackberry. I see iPhones and Blackberries everywhere but have not seen one person using the Pre. I've heard that customers have been getting fed up with this phone and there's been numerous returns. ... I've never seen such a high price for a stock that consistently loses money each quarter.

Following yesterday's market-bucking drop, shares of the smartphone maker are lagging the market by 16.5 points since that call.

The bearish takeaway?
Trust your own eyes above all else. Just as it might pay to "buy what you know" (and use and love), it's probably a good idea to stay away from stocks whose products you, along with everyone around you, aren't particularly impressed with. Due diligence is always required, but if you're not a satisfied customer, it might be a stretch to think you'll be a satisfied investor. 

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!