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Long Term PowerRatings
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It looks like the bulls are taking a rest in the market. The DJIA has slipped below the 200 and 50-day Simple Moving Averages despite the improving core economic data. The market is getting chaotic and long term investors need proven methods to find stocks most likely to outperform over the long haul. Our Long Term PowerRatings are one such proven tool.
Stocks with Long Term PowerRatings from 1 to 6 appear on our most requested screen today. These community popular stocks span the gamut from insurance to entertainment and everything in between. High rated stocks have proven to outperform their low rated brethren by a statistically relevant factor. In fact, 9 rated stocks have been proven, via significant testing over 13 years, to possess a 79.1% chance of being higher one year later.
Those with a 10 rating have proven to have an 81% chance of closing higher one year later. On the other hand, those with a low rating have shown to be simply too volatile, thus risky for the prudent long term investor. These low rated stocks can and do experience extreme price moves that potentially can work for or against you, however the fact remains that this type of volatility is simply too risky for prudent long term investment.
Let's take a closer look at a sampling of the Long Term PowerRatings communities most requested stocks.
Automatic Data Processing (ADP | Quote | Chart | News | PowerRating) - This business software company has earned a 9 Long Term PowerRating and is among the most popular community stocks today. They specialize in payroll handling for corporations and even release their own economic employment data. Fiscal third quarter was mixed for the firm with revenues declining 2% due to unfavorable currency exchange but EPS increased by 4%. The CEO, Gary Butler, reaffirmed guidance into 2009 and the fiscal fourth quarter results will be released on July 30th. Technically, shares have been downtrending since the start of June. Price has slipped below both the 50 and 200-day SMA's but support may have been found at $35.00/share.
General Dynamics (GD | Quote | Chart | News | PowerRating) - A huge aerospace company earning a 5 Long Term PowerRating hit our most popular screener. They just declared the regular quarterly dividend of 0.38 cents/share. The company is very active in defense having recently been awarded multiple large government contracts. Technically, shares were in a serious uptrend until June 8th when resistance was hit in the $60.00/share range. Price is now finding support at the 200 and 50-day SMA's.
Walt Disney (DIS | Quote | Chart | News | PowerRating) - This eponymous international entertainment company has been awarded a 4 Long Term PowerRating. Quarterly revenue has slipped 7.20% (yoy) and quarterly earning growth is down 45.90% (yoy). Technically, shares have formed a double top around the $26.00/share but have found support at the 200-day SMA at $22.46/share.
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David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.
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