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These unprecedented volatile times demand a proven method for picking stocks for long term investment. Every day we are hearing more and more about bank failures, company bankruptcies and chaotic market conditions.
Despite these uncertain conditions, there are always stocks that outperform and provide exceptional returns over the long haul. Institutions and funds have teams of expert analysts crunching numbers to pick the right stocks. They pour over all available information in an attempt to locate stocks that are most likely to rise in value.
We have simplified the stock picking process via a proprietary stock picking methodology known as "PowerRatings". PowerRatings dynamically scan the markets rating stocks on a scale from 1 to 10. 10 rated stocks have proven over the last 12 years to have an 81% chance to be higher one year later. Those with a 9 rating have a 79.1% chance of being higher one year later.
It's important to keep in mind, that these figures are dynamic, meaning that they are calculated one year from the date you read the figures, not a static number from an unknown date. This factor provides a critical edge when building and evaluating a long term portfolio of 8, 9 and 10 rated stocks. Let's take a closer look at several PowerRated stocks in the main indexes:
The Dow
Johnson & Johnson (JNJ | Quote | Chart | News | PowerRating) - This is a 9 rated drug stock that has solidly outperforming its index that has earned a 7 rating. They just reported an 8.7% sales increase and a 12.4% increase in Earnings Per Share over the second quarter. They have been in a meandering, slow uptrend since March, 2008.
General Motors (GM | Quote | Chart | News | PowerRating) - This 2 rated auto giant ranks at the lowest PowerRating of the index. It's a classic example of an uncertain volatile company that prudent, conservative long term investors should avoid. They are posting massive losses and their future is simply put, grim. It's been downtrending since October 2007 and is lagging its industry that has earned a 5 rating.
The Nasdaq
Cephalon (CEPH | Quote | Chart | News | PowerRating) - A 9 rated drug stock that is outpacing its sector that now has a 7 rating, down from a recent 8. The company has just announced that they exceeded both sales and earnings guidance for the 2nd quarter of 2008. Their new products TREANDA and AMRIX are experiencing vigorous interest and the company continues to innovate. Technically, it has been in a strong uptrend, recently pulled back, and appears to be continuing the upmove above both the 50 and 200-day Simple Moving Averages.
Express Scripts (ESRX | Quote | Chart | News | PowerRating) - An interesting pharmaceutical service firm that manages benefits and the distribution of outpatient drug needs. It has earned a 7 rating in an industry rated 7. The company just settled a major law suit with Cigna and reported a 33% increase in second quarter earnings. Technically the company is nicely above both the 50 and 200-day Simply Moving Averages
S&P 500
Campbell Soup (CPB | Quote | Chart | News | PowerRating) - This popular food company has recently announced full fiscal year results. Sales are up 8% with Earnings Per Share up 7% on the year. It has earned a 9 rating in an industry rated 8. Technically, the stock has been in an uptrend since mid May 2008.
Baxter International (BAX | Quote | Chart | News | PowerRating) - The medical supply company is clearly outperforming its 5 rated sector with the top possible Power Rating of 10. They have had strong second quarter results and have recently declared a dividend. The stock has been in a slow steady uptrend since March and is definitely worth a close look when you are considering adding to your portfolio.
David Goodboy is Vice President of Marketing for a New York City based multi-strategy fund.
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The Connors Group, Inc. ("Company") is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. The analysts and employees or affiliates of Company may hold positions in the stocks, currencies or industries discussed here. You understand and acknowledge that there is a very high degree of risk involved in trading securities and/or currencies. The Company, the authors, the publisher, and all affiliates of Company assume no responsibility or liability for your trading and investment results. Factual statements on the Company's website, or in its publications, are made as of the date stated and are subject to change without notice.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results of any individual trader or trading system published by Company are not indicative of future returns by that trader or system, and are not indicative of future returns which be realized by you. In addition, the indicators, strategies, columns, articles and all other features of Company's products (collectively, the "Information") are provided for informational and educational purposes only and should not be construed as investment advice. Examples presented on Company's website are for educational purposes only. Such set-ups are not solicitations of any order to buy or sell. Accordingly, you should not rely solely on the Information in making any investment. Rather, you should use the Information only as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments. You should always check with your licensed financial advisor and tax advisor to determine the suitability of any investment.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING AND MAY NOT BE IMPACTED BY BROKERAGE AND OTHER SLIPPAGE FEES. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
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