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PowerRatings Weekly Outlook: BNI, PFE, IBM, KO, CVX

By David Penn | TradingMarkets.com

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This week at PowerRatings.net we revisited some names that will be familiar to active investors, as well as a few well known stocks whose high Long Term PowerRatings make them potentially attractive candidates for investments going forward.

PowerRatings upgrades began the week as we noticed Long Term PowerRatings moving higher in stocks like Burlington Northern Santa Fe (BNI | Quote | Chart | News | PowerRating) - which we have featured in recent Weekly Outlooks as well as in recent articles for PowerRatings.net - and Edwards Life Sciences (EW | Quote | Chart | News | PowerRating), a stock we introduced last week when the stock was upgraded from a Long Term PowerRating of 7 to a Long Term PowerRating of 8. This week marked another upgrade in EW from an 8 to a 9.

Recall that stocks with Long Term PowerRatings of 9 have been higher one year later, more than 79% of the time in our historical testing. The average stock, by comparison, was higher one year later less than 68% of the time. Not only that, but 9-rated stocks have tended to outperform the average stock after one year, averaging gains of more than 18% compared to

To read our PowerRatings analysis of both Burlington Northern Santa Fe's and Edwards Life Sciences' most recent PowerRatings upgrades, click here.

Big Dogs of the Dow

When the going gets tough, the tough tend to turn to the blue chips, stocks with long track records of financial stability, sales growth, reliable dividends and often a significant amount of institutional commitment.

But even within the blue chips - including the bluest of the blue chips of the Dow industrials - some stocks are better than others. And at least every other week, PowerRatings.net helps investors figure out which of those stocks will give investors the greatest edge over the coming year.

Neither Pfizer - which was also our Featured Stock of the week - nor Procter & Gamble should be much of a surprise, with those two stocks having not only high Long Term PowerRatings themselves, but also coming from industries with Long Term PowerRatings of 10 and 8, respectively. As such, these stocks have appeared frequently over the past several weeks as those stocks most likely to be higher in a year's time.

But to see the technology giant affectionately known as "Big Blue" get a Long Term PowerRating upgrade in mid-May and again in the first half of June must truly warm the hearts of those who want exposure to the growth potential of the technology sector, but do not want the risk and volatility of investing in smaller, more speculative technology stocks.

Where the Investors Are

My personal favorite column every week is probably the Best of the Requests. It is one time when I can get a true sense of what stocks are on the minds of investors and long-term traders. Are investors focused on the stocks making headlines, or have stocks in certain sectors started to attract interest? The Best of the Requests is a nice weekly snapshot of where the investors are - or may want to be.

It is also a worthwhile way to remind myself that sometimes the stock you are looking for may not be especially attractive, but the stock may belong to a sector that has other stocks in it that might be worth further investigation.

A perfect example of this occurred this week when ConocoPhillips (COP | Quote | Chart | News | PowerRating) appeared on the Most Requested PowerRatings list. ConocoPhillips had an "average" Long Term PowerRating of 6. At the same time, however, ConocoPhillips belongs to an industry group - Major Integrated Oil & Gas - with an Industry PowerRating of 10.

I suspected that an industry group with a perfect 10 PowerRating likely had stronger, higher PowerRatings stocks within it than ConocoPhillips. And I was right. There were a number of higher PowerRatings stocks in the Major Integrated Oil & Gas industry group, including the highest-rated stock in the bunch: Chevron (CVX | Quote | Chart | News | PowerRating), which had a Long Term PowerRating of 8.

To read our PowerRatings analysis, "The Best of the Requests: KO, CVX, MCRL," click here.

"Best of the Requests: KO, CVX, MCRL" this week also included an analysis of 8-rated Coca Cola (KO | Quote | Chart | News | PowerRating) which also made headlines this week with news that sales gains from overseas operations would likely bolster the soft-drink maker's bottom line.

Stocks in the News

Headlines this week included technology and telecommunications companies dueling it out in the smartphone space, major executive shakeups on Wall Street, and the effect of a panic over tainted tomatoes on the world's most famous fast food chain.

Lehman Brothers Holdings (LEH | Quote | Chart | News | PowerRating) announced the replacement of both its CFO and president on Thursday. By Friday, shares of LEH were bounding higher by mid-day by 10%.

Susan Lyne, CEO of Martha Stewart Living Omnimedia (MSO | Quote | Chart | News | PowerRating)announced her resignation on Wednesday. Shares of the stock sold off by 6% on the day but were bouncing higher by 7% by afternoon trading on Friday.

Staples (SPLS | Quote | Chart | News | PowerRating) has agreed to buy Corporate Express for $2.6 billion. The deal, in which Staples was a tireless suitor of the Dutch office supplies company, works out to $14.30 per share.

Anticipated revenue growth from operations overseas led Deutsche Bank AG to upgrade Coca Cola (KO | Quote | Chart | News | PowerRating) from "hold" to "buy." Shares that were strongly higher early in the week were moving lower just as aggressively by mid-day trading on Friday.

A precautionary salmonella warning forced McDonald's (MCD | Quote | Chart | News | PowerRating) to stop putting raw tomatoes on its sandwiches in the U.S. But news of higher May store sales kept the stock price moving higher on Monday, and help(will, might, or helped?) the price remain high by week's end.

UBS is estimating that Washington Mutual (WM | Quote | Chart | News | PowerRating) will lose nearly $22 billion between now and 2011 due to losses related to mortgage lending. This number is significantly higher than Washington Mutual's own estimates.

What To Look For Next Week

Monday: Housing Market Index
Tuesday: Housing Starts / Producer Price Index /
Wednesday: Initial Jobless Claims / Leading Indicators
Thursday: None
Friday: Quadruple Witching

Best Performing Stocks (PR 8-10) of the Last Five Days

Here are some of the best performing, high Long Term PowerRatings stocks of the past five days. This week, all of the listed stocks have PowerRatings of 8 or 9.

Worst Performing Stocks (PR 1-3) of the Last Five Days

Here are some of the worst performing, low Long Term PowerRatings stocks of the past five days. This week, all of the listed stocks have PowerRatings of 1 or 2.

David Penn is Senior Editor of PowerRatings.net.

>> See more articles by David Penn

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