A Pair of PowerRatings Upgrades for Investors: CHD, IFF

The combination of a 400+ point rally in the Dow industrials and a key intraday move off the lows two days later has brought new opportunities to the surface for investors looking for stocks that are more likely than the average stock to be higher in a year.

These new opportunities come in the form of PowerRatings upgrades and two stocks have seen their Long Term PowerRatings increase from a commendable 8 to a stand-up-and-take-notice 9.

Why notice a 9? Our research, involving thousands and thousands of simulated trades between 1995 and 2007, revealed that stocks with Long Term PowerRatings of 9 were both more reliable and better performers than the average stock. Specifically, we learned that 9-rated stocks were higher one year later more than 80% of the time. Compare that to the average stock which was higher one year later less than 68% of the time between 1995 and 2007.

In addition to being more reliable, 9-rated stocks were simply bigger gainers in a year's time than the average stock. Stocks with Long Term PowerRatings of 9, according to our research, tended to gain an average of more than 18% after one year. The average stock, over the same time period, gained an average of between 12-13% in a year's time.

Not only do both of our upgraded stocks have high Long Term PowerRatings, but also both come from industries with PowerRatings that are even more impressive.

Our first stock, Church & Dwight (CHD@CHD | Quote | Chart | News | PowerRating) , for example, comes from the 10-rated Cleaning Products industry group while our second stock, International Flavors and Fragrances (IFF@IFF | Quote | Chart | News | PowerRating) also comes from a 10-rated industry, Synthetics.

Why is this important? We have found that industries with PowerRatings of 10 have been among the best places for investors to look for stocks. Going back to 1995, our research revealed that 10-rated industries provided investors with average annualized returns of more than 35%. This is more than twice the average annualized returns of the average industry group, which stood at approximately 14.61% over the same time period.

As such, we find the combination of high PowerRatings stocks and high PowerRatings industries to be a particularly winning one for active investors.

Let's take a closer look at both Church & Dwight and International Flavors and Fragrances.

Shares of Church & Dwight Company have oscillated between the high $50s and the low $50s for the past few months going back to December. Throughout this time, the stock has maintained both its position above the 200-day moving average as well as its Long Term PowerRating of 8. The stock's most recent move, including a rally off the intraday lows on Thursday that mimicked the "kick save" the market achieved on the same day, helped Church & Dwight Company earn the PowerRating upgrade from 8 to 9.

Since the year began, International Flavors and Fragrances has been trading in a seven-point range between, roughly, $46 and $39. Unlike Church & Dwight, which is trading above its 200-day moving average, shares of International Flavors and Fragrances have traded below their 200-day moving average for months. The stock's Long Term PowerRating had sagged from a 9 to an 8 in recent days, but recent strength has helped bump International Flavors and Fragrances' PowerRating back up to a solid 9.

You can own an entire portfolio of stocks that are both more reliable and better performers than the average stock. Our Long Term PowerRatings rate thousands of stocks on a scale of 1 to 10 based on their financial strength and record for above-average growth. The highest PowerRatings stocks have actually been higher more than 80% of the time one year later. Click here to get your free, 14-day trial to our Long Term PowerRatings--or call us at 888-484-8220.

David Penn is Senior Editor at PowerRatings.net.