5-Star Stocks on the Upswing

Sadly, there's no such thing as an ultimate buy signal when it comes to investing in stocks. Identifying companies with the wind at their back takes time, patience, and a good dose of due diligence.

There is, however, an easy way to increase your odds of finding the stocks that will beat the market. At Motley Fool CAPS, the Fool's investing community of more than 115,000 members, we've found that five-star stocks, as a group, substantially outperform the broader market -- to the tune of 12 percentage points on an annualized basis from November 2006 to July 2008.

In order to fully capture the upside potential of those five-star stocks, it makes sense to identify them just as soon as they achieve five-star status. Fortunately, our CAPS screener now makes it possible to do this. Below, for example, is a list of companies that have been upgraded to five-star status from four stars just yesterday. These stock ideas are only a starting point, of course. Be sure to join us on CAPS to dig in even further.

Company	All-Stars Saying Outperform
ENGlobal Corp (Nasdaq: ENG)	305 of 318
Teck Cominco Limited (USA) (NYSE: TCK)	617 of 631
Assisted Living Concepts, Inc. (NYSE: ALC)	109 of 112
Atheros Communications, Inc. (Nasdaq: ATHR)	1317 of 1347
Guangshen Railway Co. Ltd (ADR) (NYSE: GSH)	447 of 463
Kinder Morgan Management, LLC (NYSE: KMR)	108 of 116
Belden, Inc. (NYSE: BDC)	126 of 132

Data from Motley Fool CAPS, Sept. 2, 2008.

Copyright © 2008 Universal Press Syndicate