Quote

Markets Worldwide

Day Trading

Stock Trading

Stock Market Analysis

Stock Rating

View More Topics >>

View Trading Glossary >>

Receive Alerts Free
For One Week!

Short Term PowerRatings
Use PowerRatings every day to find the stocks for tomorrow to focus on and the ones to avoid.
Sign Up Now >>
Long Term PowerRatings
Use PowerRatings to find the stocks to focus on to build your portfolio for long-term gains.
Sign Up Now >>
Gary Kaltbaum Intraday Breaking Setups
Let Gary Kaltbaum send you timely emails to alert you when breakouts occur.
Sign Up Now >>
Kevin Haggerty's Professional Trading Service
Every day receive the best plan of attack for the next day's trading directly from professional trader Kevin Haggerty.
Sign Up Now >>

PowerRatings Weekly Outlook: PG, EW, BNI, ARB, CLHB

By David Penn | TradingMarkets.com

Archives

Feedback

Email Article Link

Close X

This week at PowerRatings.net we reviewed and analyzed many of the same sorts of "recession beater" stocks that have been a staple of the PowerRatings Weekly Outlook for the past several weeks. And if you are a regular reader of this column then we hope that you have managed to include some of these stocks - hailing from industry groups like Diversified Utilities, Personal Products and Processed and Packaged Goods - in your investment portfolio.

However, we also saw a number of high Long Term PowerRatings stocks appear in our screens that do not fall into the categories we know and have come to rely on since the markets began struggling months ago. And in addition to some old favorites, these are some of the stocks we would like to underscore for readers in today's column.

Hunger Gains

To read our PowerRatings analysis of these three food stocks, click here.

While not the highest possible Long Term PowerRating, a rating of 8 tells potential investors that the stock in question, based on our historical testing, belongs to that group of stocks that have been higher one year later more than 74% of the time. Compare this to the average stock, which has been higher one year later less than 68% of the time, according to our research.

Moreover, not only have 8-rated stocks been more reliable than the average stock, but also these stocks have tended to outperform the average stock by an impressive margin. Based on our analysis of thousands and thousands of simulated stock trades between 1995 and 2007, we discovered that stocks with Long Term PowerRatings of 8 have tended to gain more than 17% in a year's time. The average stock, on the other hand, has gained between 12-13% over the same time period.

Utilities Stocks: Not Just for Widows Anymore

The rap on utilities stocks for decades was that these equities were the investment equivalent of the 90-year-old grandma driving 45 mph on a 65 mph stretch of highway. But in a world where even the returns on money market funds have been tainted by exposure to the collapsed subprime mortgage market, these allegedly stodgy utilities stocks are in as great a demand as ever.

What do you get with an investment in a utilities stock? For one, there can be more in the way of capital appreciation with utilities investment that is traditionally thought. Although the Dow Jones utility index is relatively flat year-to-date, the index is up more than 12% from the March lows, compared to the Dow industrials which, in addition to being negative year-to-date, are as of this writing within 150 points of their March lows.

PG&E Corp. appeared as part of our look at PowerRatings Upgrades on Monday. Centerpoint Energy was among the five stocks that investors were most interested in learning more about in our weekly "Best of the Requests" column.

Newcomers of Note

I'm not going to sit here and try and convince you that food and utilities stocks are the most exciting, boast-about-your-stock-picking-prowess stocks in the world. And some of the surprising stocks that appeared on our radar this week may not rock your boat either. But they do remind us that when it comes to stocks that have the ability to outperform the average stock in a year's time, there are always more places to look than you might think.

For example, how about a 9-rated stock like Arbitron (ARB@ARB | Quote | Chart | News | PowerRating), which belongs to the Research Services industry group? Arbitron is in the business of providing consumer data and analysis to media organizations like radio stations as well as to advertising agencies.

The stock's Long Term PowerRating has improved as the stock has advanced over the past few months - from 6s and 7s in April to 8s in May and now, in June, to a PowerRating of 9. From the beginning to April to mid-June, Arbitron gained approximately 10 points or more than 23%.

Another stock that we did not expect to see on our Long Term PowerRating radar was Activision (ATVI@ATVI | Quote | Chart | News | PowerRating), Shares of Activision took off in early May, breaking out of a trading range that had contained the stock since the beginning of the year. As they did so, the shares earned PowerRatings upgrades from 7 to 8 in late May, and from 8 to 9 in mid-June.

Activision is a leading video and computer game maker whose titles include the popular "Guitar Hero" game, as well as a game based on the hit movie, "Kung Fu Panda."

Stocks in the News

Headlines this week included surprisingly good news from a major player in the rest and relaxation business, the fallout from the failed Microsoft bid to buy Yahoo, and a powerful reminder that when Goldman Sachs speaks, investors listen.

CME Group Inc. (CME | Quote | Chart | News | PowerRating) was the S&P 500's biggest gainer earlier in the week on word that the Justice Department would allow CME's purchase of NYMEX, the New York Mercantile Exchange.

Carnival Cruise Lines (CCL | Quote | Chart | News | PowerRating) beat analyst estimates by a whopping $0.18 per share this week in its earnings announcement. Cost-cutting and higher priced cruise plans helped offset expenses related to soaring fuel costs.

What To Look For Next Week

Monday: None
Tuesday: Consumer Confidence
Wednesday: FOMC Announcement / New Home Sales / Durable Goods
Thursday: Jobless Claims / Existing Home Sales
Friday: Personal Income and Outlays

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

Related Articles

More Related Articles >>

PREMIER SPONSORED LINKS

TRADE CENTER

The TradingMarkets Directory

Stocks

Options

Forex

E-mini/Futures

How to Trade

Tools

PowerRatings

Trading Contests

Premium Subscription Services

Short Term PowerRatings

Free Trial

Long Term PowerRatings

Free Trial

TradingMarkets Subscription

Free Trial

Daily Battle Plan

Free Trial

Gary Kaltbaum - Intraday Breaking Alerts

Free Trial

Kevin Haggerty Professional Trading Service

Free Trial

RELATED SITES

Please call 1-213-955-5858 ext. 1

All analyst commentary provided on TradingMarkets.com is provided for educational purposes only. The analysts and employees or affiliates of TradingMarkets.com may hold positions in the stocks or industries discussed here. This information is NOT a recommendation or solicitation to buy or sell any securities. Your use of this and all information contained on TradingMarkets.com is governed by the Terms and Conditions of Use. Please click the link to view those terms. Follow this link to read our Editorial Policy.