Pullbacks in energy stocks and the continued sideways action in the Utility Indexes have created opportunities for investors looking for stocks that have a great chance of being higher in year's time.

Of the four stocks in today's report, two of them come from the top-rated Oil & Gas Pipelines industry and two come from the Diversified Utilities industry. Both industries, it should be pointed out, have Long Term PowerRatings of 10, making them some of the best places in which investors should look for stocks.

Why so? Our research into industry group behavior since 1995 tells us that industries with PowerRatings of 10 have dramatically outperformed the average industry over the past several years. Specifically, we found that industries with PowerRatings of 10 produced average annualized returns of more than 35% from 1995 to 2007. By comparison, the average industry produced average annualized returns of approximately 14.61%.

The fact that both industries have PowerRatings of 10 means that the stocks from those industries--especially the highest PowerRating stocks--are likely to be some of the best performing stocks in a year's time.

What makes these stocks special is not only that they come from industries with PowerRatings of 10, but also that all four of these stocks themselves have Long Term PowerRatings of 10. As is the case with our PowerRatings for industries, a 10 rating is the highest rating a stock can get in our PowerRatings system. A stock with a Long Term PowerRating of 10 is every bit as impressive and noteworthy as an industry group with a PowerRating of 10.

Consider this: stocks with Long Term PowerRatings of 10 have been higher one year later more than 80%of the time. 10-rated stocks, according to our research, have also tended to gain more than 20% after one year.

How has the average stock fared? Over the same time period from 1995 to 2007, the average stock has been higher one year later less than 68% of the time. In terms of performance, the average stock has tended to gain between 12-13% after a year--as much as 700 basis points less than the 10-rated stock.

When you combine stocks with the highest possible Long Term PowerRatings with industries with the highest possible PowerRatings, you are looking at some of the best opportunities for active investors in the market. Selecting high PowerRatings stocks that come from high PowerRatings industries is one of our key recommendations for active investors looking to build the kind of stock portfolios that will stand up in good markets as well as difficult ones.

Plains All American Pipeline (PAA | news | PowerRating | PR Charts )

Energy East (EAS | news | PowerRating | PR Charts )

Centerpoint Energy (CNP | news | PowerRating | PR Charts )

Energy Transfer Equity LP (ETE | news | PowerRating | PR Charts )

You can get full access to all our proprietary PowerRatings data and tools--including our PowerRatings charts--with your free, 14-day trial to PowerRatings.net. Not only will you know what stocks are likely to be higher in a year's time, but also we'll keep you informed about key stocks that may have been overlooked by way of our Featured Stock Spotlight, and let you know about the week to come with our Weekly Outlook published every Friday. Click here to start your free, 14-day trial to PowerRatings now--or give us a call at 888-484-8220.

David Penn is Senior Editor at PowerRatings.net.

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