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PowerRatings Across The Indexes: MO, JNJ, CHKP, TEVA, WYE, ABT
Tuesday, June, 30 2009

Here are several Long Term PowerRated stocks from each of the 3 major indexes that may be worth a deeper look. More >>
Monday PowerRatings Upgrades: PG, CRL, RDK
Monday, June, 29 2009

Our Long Term PowerRatings upgrades contain stocks from such diverse sectors as grocery stores, biotech and advertising. More >>
More Analysis >>
PowerRatings Best of the Requests: PFE, PG, ETE
By David Penn
May 1, 2008   3:00 PM ET

Stocks that investors are asking about today include a pair of familiar household names, as well as a top-rated oil and gas pipeline company.

Every day active investors and long term traders come to PowerRatings.net to find out just how the stocks that are in the headlines or announcing earnings measure up. Of all the metrics investors use to determine whether or not stocks are a good investment, our Long Term PowerRatings excel in providing a sense of both the reliability and performance potential of individual stocks.

Reliability and performance, after all, are the two characteristics that investors and long term traders demand in the stocks they invest in. Reliability, in this context, simply refers to the likelihood that a stock will be higher, rather than lower, in a year's time. It is a basic litmus, type of test that lets an investor know that the stock in question is one that is, at the most basic level, a stock that is likely to appreciate over the next several months.

Of course, investors and long term traders want this appreciate to be as significant as possible. That is why our Long Term PowerRatings also take into account performance, particularly performance relative to the average stock. In addition to wanting stocks that are likely to be higher in, say, a year's time, investors want stocks that are likely to beat the average stock--and the bigger the margin the better.

All three stocks in today's report on our PowerRatings Most Requested list fit this bill of being stocks with above average reliability and performance potential. For example, all three stocks have Long Term PowerRatings of at least 8. Our research, examining thousands and thousands of simulated trades between 1995 and 2007, indicated that stocks with Long Term PowerRatings of 8 or higher were higher one year later more than 74% of the time. By contrast, the average stock was higher over the same period less than 68% of the time.

This is the reliability factor of high Long Term PowerRatings stocks in action.

In addition, we learned that stocks with Long Term PowerRatings of 8 or higher also tended to outperform the average stock by a significant margin. Stocks rated 8 or higher have tended to gain, on average, 17% after one year. The average stock, on the other hand, gained between 12-13% in a year's time.

Here again we see the advantage of the high Long Term PowerRating stock compared to the average stock.

Not only do all three stocks in today's report have Long Term PowerRatings of 8 or more, but also all three come from industries that have PowerRatings of 8 or more--with two stocks coming from top-rated industries with Industry PowerRatings of 10.

How significant is this? We found that industries with high PowerRatings were just as impressive--if not moreso--than stocks with high PowerRatings.

Consider: The average industry from 1995 to 2007 realized an average annualized return of approximately 14.61%. Industries with PowerRatings of 8, over the same time period, produced average annualized returns of 20.26%.

Industries with PowerRatings of 10? How about more than 35% in average annualized returns?

This is one reason why we encourage investors to look at our PowerRatings not just in terms of the rating for the stock, but also for the rating of the industry group to which the stock belongs. More often than not, the better stock will be the stock that has both the high Long Term PowerRating and the high Industry PowerRating, as opposed to having only the high Long Term PowerRating alone.

Pfizer (PFE | news | PowerRating | PR Charts ) Long Term PowerRating 8. Industry PowerRating 10

Procter & Gamble (PG | news | PowerRating | PR Charts ) Long Term PowerRating 9. Industry PowerRating 8

Energy Transfer Equity (ETE | news | PowerRating | PR Charts ) Long Term PowerRating 10. Industry PowerRating 10.

Looking for more long-term solutions to your investing problems? Don't let the volatility of this market lead you to miss out on stocks you'll be glad to have bought a year from now. Click here to get a copy of our special, Free Report on the "5 Secrets to Successful Stock Investing," and learn what you need to know as an active investor looking to invest in companies with a history of financial strength and a track record for growth. Call us at 888-484-8220 to get your copy of the "5 Secrets to Successful Stock Investing" today.

David Penn is Senior Editor at PowerRatings.net.



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