Stock Spotlight: Kimberly Clark (KMB)

If you've noticed a trend toward the kitchen and bathroom cabinets when reading about our Featured Stock Spotlight picks over the past few weeks, then you won't be surprised to see Kimberly Clark (KMB@KMB | Quote | Chart | News | PowerRating) take top honors today.

Kimberly Clark is one of the highest Long Term PowerRatings stocks in the Personal Products industry, an industry it shares with fellow 9-rated stocks Colgate-Palmolive (CL@CL | Quote | Chart | News | PowerRating) and Procter & Gamble (PG@PG | Quote | Chart | News | PowerRating). And as a stock with a Long Term PowerRating of 9, Kimberly Clark belongs to that class of equities that, according to our research, have dramatically outperformed the average stock since 1995.

We conducted a study involving thousands and thousands of simulated trades between 1995 and 2007. Through that quantitative analysis were able to establish criteria based on volume, volatility, momentum and trend that allowed us to classify stocks using a rating system of 1-10. This rating system, the PowerRatings system, provides key information to active investors about the reliability and performance potential of thousands and thousands of stocks.

We discovered, for example, that the worst performing stocks, the stocks with Long Term PowerRatings of 1 or 2, not only failed to keep up with the average stock, but actually were lower one year later more than 58% of the time.

By contrast, the best performing stocks, the stocks with Long Term PowerRatings of 9 or 10 were higher one year later more than 79% of the time. And they did so while tending to outperform the average stock by a wide margin.

Kimberly Clark, with its Long Term PowerRating of 9, is just such a stock. And the fact that Kimberly Clark belongs to an industry with a PowerRating of 10 makes the stock all the more attractive for investors looking to add quality stocks to their investment portfolios.

Kimberly Clark is behind some of the more popular and widely known consumer brands in the personal care and hygiene industry business, including names like Huggies brand diapers and Kleenex brand facial tissue. The company, however, is also heavily involved in providing specialized medical and professional hygiene and safety products for a variety of industries.

Currently trading below its 200-day moving average, Kimberly Clark has been traveling in a steadily narrowing range between, roughly $67 and $62. The stock earned its Long Term PowerRating of 9 in late January after a brief 4-5 point rally.

I mentioned the industry group Kimberly Clark came from. It's worth mentioning again. Our research, looking into industry group behavior since 1995, revealed that industries with PowerRatings of 10 produced average annualized returns of more than 35%. Compare that performance to the average industry group, which produced average annualized returns of approximately 14.61%.

One of the best things investors using Long Term PowerRatings can do to improve the performance of their portfolios is to include as many high PowerRatings stocks from high PowerRatings industries as possible. Kimberly Clark is just one example of such a stock.

By the way, if buy and hold investing has left you feeling hopeless, a free 14-day trial to our Long Term PowerRatings might be just the thing to jump start your portfolio. In addition to our market commentary and articles on the top PowerRatings stocks for investors, you will get access to our proprietary PowerRatings data and PowerRatings charts. Click here for your free trial to Long Term PowerRatings today—or call us at 888-484-8220.

David Penn is Senior Editor at PowerRatings.net.