Hey there, Fools. I've summoned our
Motley Fool CAPScommunity once again to highlight a few
of Tuesday's biggest winners among the stocks with
top ratingsof four or five stars:
Company
Yesterday's Gain
Caraco Pharmaceutical
Laboratories (NYSE: CPD)
15.08%
USEC (NYSE: USU)
6.27%
China Marine Food Group
5.19%
China Green Agriculture
3.87%
Exelixis
3.34%
There's a reason I selected those notable gainers, as
opposed to other winners making noise on Tuesday, like
low-rated
Motorola (NYSE: MOT). Stocks go up all the
time, but unless you were able to predict the pop, what does
it matter? Â
Our community of more than 145,000 CAPS Fools considers
its high-star stocks the most likely to outperform the
market.
Written in the (five) stars?
For example, 97% of the 418 members who've
rated
Caracohave
a bullish opinion of the stock. Less than
two monthsago, one of those Fools,
SeekBalance, updated our community on the generic-drug
maker's compliance issues:
The FDA's shutdown of [Caraco's] manufacturing
operations has scared investors away, but lots of recent
capital spending and last week's press release imply that
the FDA will allow [Caraco] to resume production sometime
soon. Even without manufacturing, [Caraco] has continued to
generate a positive operating cash flow. ... So we're
pretty safe on the downside, and we can expect a big [price
per share] bump with the resumption of manufacturing
operations.
Including yesterday's market-bucking pop, Caraco has risen
over 25% since that call.
The bullish lesson?
The most important job you have as an investor
is to quantify a stock's
upsideand
downside. At the very least, you should always make sure
you're being compensated
appropriatelyfor the risks you're taking on. If a
stock's
potential payoffseems generous compared to the chance of
loss -- as CAPS' SeekBalance surmised with Caraco -- it's
probably best to take Mr. Market up on his offer.
And now for the losers ...
Of course, winning isn't everything in the
stock market.
Here are five of Tuesday's biggest decliners with one- or
two-star ratings: Â
Company
Yesterday's Loss
Royal Bank of Scotland (NYSE:
RBS)
7.85%
Sunrise Senior Living
Continued... |