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PowerRatings Weekly Outlook: BNI, PEP, GIS, K, LNCR
By David Penn | TradingMarkets.com
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When you hear that a legend like billionaire Warren Buffett is interested in a sector, that's certainly one thing. But when one of the featured stocks of that sector appears in both our PowerRatings Upgrades and Most Requested lists, well, that's when it really is time to take notice.

In a recent television interview, Buffett iterated his interest in railroad stocks, stocks he had begun accumulating with some eagerness earlier this year. And as it turns out Burlington Northern Santa Fe (BNI | Quote | Chart | News | PowerRating), the second largest railroad in the country and one of the companies Buffett has been buying, appeared on our radar first thing Monday morning as its Long Term PowerRating increased from an average 7 to a "Consider Buying" 8.

Remember that stocks with Long Term PowerRatings of 8 have been higher one year later more than 74% of the time according to our research. Not only that, but 8-rated stocks have performed impressively in our historical testing. We found that stock with Long Term PowerRatings of 8 averaged gains of more than 17% after one year.

To read more about our PowerRatings coverage of Burlington Northern Santa Fe, click here.

That Monday article on Long Term PowerRatings upgrades also noted a stock that had moved from a Long Term PowerRating of 8 to a Long Term PowerRating of 9. That stock was Hawaiian Electric Industries (HE | Quote | Chart | News | PowerRating).

But here's where the good gets better. Not only does Hawaiian Electric Industries come from a top rated industry group in the Electric Utilities. The stock has also earned an additional PowerRatings upgrade over the course of the week. As of Friday, Hawaiian Electric Industries had moved from a 9 to a 10.

Feed Me! Food Stocks to the Front

Whether we get recession, slow down or something else entirely, we've all still got to eat - which is what investors in three of our featured high PowerRatings food stocks will be banking on this year.

We profiled three companies involved in the Packaging and Processed Goods industry group this week: Pepsico Inc. (PEP | Quote | Chart | News | PowerRating), General Mills (GIS | Quote | Chart | News | PowerRating), and Kellogg (K | Quote | Chart | News | PowerRating). All three stocks have high Long Term PowerRatings - both General Mills and Kellogg earning 8s while Pepsico has a rating of 9. And all three sit at the top of an industry group that itself sports a more than respectable Industry PowerRating of 8

You can read our PowerRatings coverage of these top rated food stocks here.

Healthcare Under the Spotlight

We knew when we decided to make Lincare Holdings Inc. (LNCR | Quote | Chart | News | PowerRating) our Featured Stock Spotlight for the week that we had a good stock on our hands. After all, not only does Lincare have the sort of high Long Term PowerRating and high Industry PowerRating that we look for in Featured stocks. But also the stock had appeared in our list of Best Performing High PowerRatings Stocks in last week's Weekly Outlook.

Click here if you missed last week's PowerRatings Weekly Outlook.

Lincare Holdings has a Long Term PowerRating of 9. Stocks with Long Term PowerRatings of 9 have been higher one year later more than 79% of the time according to our research. This same research showed that 9-rated stocks between 1995 and 2007 gained an average of more than 18% after one year. Compare this to the average stock, which gained between 12-13% over the same time period.

Lincare Holdings is a member of the top-rated Home Health Care industry group. The company provides medical equipment and services, ranging from wheelchairs and hospital beds to oxygen and respiratory services. Read more about Lincare Holdings and its high Long Term PowerRatings in our Featured Stock Spotlight article for the week by clicking here.

Stocks in the News

Acquisitions - both friendly and not-so-friendly - were at the top of this week's stocks in the news as financials continued to lose money and retailers surprised to the upside with better than expected quarterly earnings.

Carl Icahn, who has accumulated 50 million shares of Yahoo! (YHOO | Quote | Chart | News | PowerRating) since Microsoft's (MSFT | Quote | Chart | News | PowerRating) now-aborted bid, has begun a fight to challenge Yahoo!'s current board and get the company back to the bargaining table.

CBS Corporation (CBS | Quote | Chart | News | PowerRating) dramatically expanded its online presence in agreeing to terms to buy Cnet Networks (CNET | Quote | Chart | News | PowerRating) for $1.8 billion.

Shares of Whole Foods Markets Inc. (WFMI | Quote | Chart | News | PowerRating) plunged this week on disappointing earnings as the company continued to digest its recent acquisition, Whole Oats Markets.

Despite reporting sizable losses, the world's largest bond insurer MBIA (MBIA | Quote | Chart | News | PowerRating) managed to drift higher on the week on the company's insistence that it did not need to raise capital.

American International Group (AIG | Quote | Chart | News | PowerRating) managed to raise $17 billion in stock and bond sales, significantly more than the company had pledged to raise a week previous.

It's good to be the king - of retail. Wal-Mart (WMT | Quote | Chart | News | PowerRating) this week reported earnings that beat analyst estimates, leading a week of strong earnings from a variety of retailers including Ann Taylor (ANN | Quote | Chart | News | PowerRating) and T.J. Maxx (TJX | Quote | Chart | News | PowerRating).

Hewlett Packard (HPQ | Quote | Chart | News | PowerRating) looks to challenge International Business Machines (IBM | Quote | Chart | News | PowerRating) in the IT services space with its acquisition of Electronic Data Systems (EDS | Quote | Chart | News | PowerRating) announced this week.

What To Look For Next Week

Monday: Leading Indicators
Tuesday: Same Store Sales / Producer Price Index
Wednesday: FOMC Minutes
Thursday: Jobless Claims / Money Supply
Friday: Existing Home Sales

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.

Kimberly Clark Group (KMB | Quote | Chart | News | PowerRating) Long Term PowerRating 9
Hormel Foods Corporation (HRL | Quote | Chart | News | PowerRating) Long Term PowerRating 9
International Business Machines (IBM | Quote | Chart | News | PowerRating) Long Term PowerRating 8
Abbott Laboratories (ABT | Quote | Chart | News | PowerRating) Long Term PowerRatings 8
Burlington Northern Santa Fe (BNI | Quote | Chart | News | PowerRating) Long Term PowerRating 8

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.

Flotek Industries Inc. (FTK | Quote | Chart | News | PowerRating) Long Term PowerRating 2
Build-a-Bear Workshop (BBW | Quote | Chart | News | PowerRating) Long Term PowerRating 2
Beazer Homes USA (BZH | Quote | Chart | News | PowerRating) Long Term PowerRating 2
Blue Coat Systems, Inc. (BCSI | Quote | Chart | News | PowerRating) Long Term PowerRating 1
ProShares UltraShort Real Estate (SRS | Quote | Chart | News | PowerRating) Long Term PowerRating 1

David Penn is Senior Editor for PowerRatings.net.


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