PowerRatings Weekly Wrap-Up

Highly volatile and chaotic are the words to describe the stock market action this week. Things started out on a hugely positive note with the news of a Fannie Mae (FNM | Quote | Chart | News | PowerRating) and Freddie Mac (FRE | Quote | Chart | News | PowerRating) government intervention lifting the knocked down DJIA nearly 300 points. Financial reality hit equities on Tuesday when takeover talks for the dying investment bank, Lehman Brothers (LEH | Quote | Chart | News | PowerRating) ceased, triggering a steep sell off giving back all of the earlier gains.

Brave bargain hunters came out of their caves on Wednesday buying energy names which lifted the market to a positive close. The rally continued Thursday as transports and material stocks led the advance due to falling energy prices.

Friday appears to be shaping up as another volatile and uncertain day to end the week. Lehman Brothers spiked into the high 5s in pre market trading only to collapse once again as hope fizzles for anything but a brutal take under. Index futures are well below fair value as we enter the final hour prior to the opening bell.

Chaotic market conditions such as these require a tested and proven method to pick safe, yet likely to appreciate stocks for your long term portfolio. Our Long Term PowerRatings are built upon 12 years of extensive, statistically valid studies across most market conditions. Our studies indicate that stocks earning a Long Term PowerRating of 10 have an 81% chance of being higher one year later. Those with a 9 rating possess a 79.1% chance of trading higher one year later. Conversely, stocks that are received low ratings of 1, 2, or 3 have proven to be too volatile and risky for prudent, conservative long term investors.

You can clearly see the statistical advantage in building a long term portfolio consisting of 9 and 10 rated stocks, while avoiding the lower ratings. Let's take a closer look at several of the Long Term PowerRated stocks profiled this week:

AT&T (T | Quote | Chart | News | PowerRating) - This stock fondly known as "telephone" on the exchange floor was awarded an 8 rating in a sector that has a 9 Long Term PowerRating. They recently scored a coup by being the wireless provider partner with Apple for their wildly popular iPhone device. They are constantly upgrading, innovating and marketing on a global scale. Technically, the stock appears to have hit a bottom around 30 and has been slowly climbing up off this level since mid July, 2008.

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 and appears to be forming a channel here between 71 and 75. Savvy technical long term trend traders may want to look for a breakout above 75 to enter longs.

General Mills (GIS | Quote | Chart | News | PowerRating) - This giant consumer food company is outpacing its sector with a 9 rating. Fiscal 2008 results were strong with a 10% increase in net sales and a 6% increase in operating profits. Technically, an extremely solid uptrend is evident starting around July 1, 2008.

Safety Insurance Group (SAFT | Quote | Chart | News | PowerRating) - An automobile insurance company focusing on the Massachusetts market was just upgraded from an 8 to a 9 Long Term Power Rating. The book value per share increased $1.19 over the second quarter and net investment income increased about .4 million over the same period. They have recently declared a dividend of $0.40. The company appears to be losing ground fundamentally in some regards, but technically it's looking good. An uptrend started on July 7th, 2008 and price is above both the 50 and 200-day Simple Moving Averages.

Cephalon (CEPH | Quote | Chart | News | PowerRating) - With a Long Term PowerRating of 9, this 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.

CFI Group (CFIG | Quote | Chart | News | PowerRating) tumbled hard as the interdealer broker of credit derivatives failed to complete a merger with a competitor earlier in the week

Live Nation (LYV | Quote | Chart | News | PowerRating) - The concert promoter rocked higher after agreeing to sell tickets at locations managed by SMG

Allergan (AGN | Quote | Chart | News | PowerRating) soared after the Botox maker announced a study indicating that Botox is not only a wrinkle reducer but a potential cure for migraines

Foster Wheeler (FWLT | Quote | Chart | News | PowerRating) announced a buy back of $750 million of its shares in an effort to boost value

Cambell Soup (CPB | Quote | Chart | News | PowerRating) - Net jumped 46% on revenue gains despite falling margins

This Weeks Top Performers

Nstar (NST | Quote | Chart | News | PowerRating)
Cambell Soup (CPB | Quote | Chart | News | PowerRating)
Allete (ALE | Quote | Chart | News | PowerRating)

This Weeks Worst Performers

Enersys (ENS | Quote | Chart | News | PowerRating)
Millicom Intl (MICC | Quote | Chart | News | PowerRating)
Merrill Lynch (MER | Quote | Chart | News | PowerRating)

What To Look For Next Week

Monday - Industrial Production
Tuesday - Core CPI
Wednesday - FOMC policy statement
Thursday - Housing Starts
Friday - Initial Claims

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