Hey there, Fools. I've summoned our
Motley Fool CAPScommunity once again to highlight a few
of Monday's biggest winners among the stocks with
top ratingsof four or five stars:
Company
Yesterday's Gain
Hercules Offshore (Nasdaq: HERO)
14.48%
Suncor Energy (NYSE: SU)
6.86%
Cemex
6.80%
Yamana Gold (NYSE: AUY)
4.65%
Freeport-McMoRan (NYSE: FCX)
4.58%
There's a reason I selected those notable gainers, as
opposed to other winners making noise on Monday, such as
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 140,000 CAPS Fools considers
its high-star stocks the most likely to outperform the
market.
Written in the (five) stars?
For example, 97.2% of the 510 All-Star members who've
rated
Hercules
Offshorehave a bullish opinion of the stock. In
late May, one of those Fools,
JakilaTheHun, explained why the offshore driller seemed
like a particularly slick move:
The logical conclusion is that demand for their services
will increase as oil prices continue their inevitable march
up towards $70 /gallon. At that point, offshore oil becomes
more attractive and investors become more interested in
companies like [Hercules]. ... Downside risk is $0 due to
their moderately heavy debt load. Upside potential might be
around $45.
Consistent with that call, shares of Hercules surged
yesterday after a Wall Street analyst upgraded the stock on
rising demand from the Gulf of Mexico jackup rig and inland
barge markets.
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 all the risks you're taking on. If
an investment's potential payoff seems generous compared with
the chance of loss -- as JakilaTheHun surmised with Hercules
-- 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 Monday's biggest decliners with one- or
two-star ratings:
Company
Yesterday's Loss
Sunrise Senior Living (NYSE: SRZ)
32.02%
Crocs
Continued... |