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Wednesday, December 03, 2008
Brian D. Pacampara :: Townhall.com Columnist
Tuesday's Biggest Stock Stars
by Brian D. Pacampara
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With unemployment at 10.2%, what will happen by the end of Obama's first term?



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.

Without further ado:

Company

Yesterday's % Gain

Exelixis (Nasdaq: EXEL)

18.71%

Tata Motors (NYSE: TTM)

17.07%

China Fire & Security

15.17%

Manitowoc (NYSE: MTW)

13.46%

Foster Wheeler

12.33%

There's a reason why I selected notable five-star gainers, as opposed to other big-name winners making noise on Tuesday, like low-rated Sprint Nextel (NYSE: S). Stocks go up all the time, but unless you were able to predict the pop, what does it matter?

Our community of more than 120,000 CAPS Fools considers its five-star stocks the most likely to outperform the market. So far, CAPS has indeed proved its market-beating prowess: In the first 20 months since its inception in late 2006, five-star stocks beat the market by 12 points, annualized.

Written in the (five) stars?
For example, 97% of the 2,267 CAPS members who've rated Motley Fool Rule Breakers recommendation Exelixis have a bullish opinion of the stock. Early last month, one of those Fools, apiperisdown, explained exactly what gave the biotech stock an inside edge:

Insider buying indicates that they are not that bummed that [GlaxoSmithKline (NYSE: GSK)] passed. CEO put a million dollar bet on his company right before Halloween. Trick? or Treat? I'm gonna take a shot and say treat. Giddy up.

With the help of yesterday's pop, Exelixis is beating the market since that call.

The bullish lesson?
Always keep an eye on the insiders. Managers and board members, after all, know their business better than anyone else. If you see them buying stock on the open market, it's one of the best indicators of a promising opportunity. Even though CEO George Scangos actually bought $80,000 worth of stock on Oct. 30, a 2.2% increase in his direct holdings, what Peter Lynch once said still holds true: "Insiders might sell their shares for any number of reasons, but they buy them for only one: They think the price will rise."

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:

Company

Yesterday's % Loss

General Growth Properties Continued...

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About The Author

Brian D. Pacampara is an investment expert and analyst for the Motley Fool.

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