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The Fed decided not to move interest rates from their all time lows yesterday but the market reacted in a severe negative manner. Interestingly, stocks anticipated the decision by creeping higher into it, then once it was made official the selling waves started. It was a classic buy the rumor, sell the news scenario. This move caught many traders and investors off guard. The question on every investors mind is will the bulls stay in control or will the bears have their day in the sun? Truth is no one really knows for sure. One thing is for certain; our Long Term PowerRatings have been creeping ever higher across a variety of stocks and sectors. For those of you unfamiliar with our Power Rating method is based upon 12 years of extensive, statistically valid studies spread across most market and economic climates. The results are downright impressive resulting in an easy to use, numerical rating system that can pinpoint those stocks that truly have the best odds of top performance over the longer term. Stocks that have earned a 10 Long Term PowerRating have been proven to have a 81% chance of being higher one year later, those with a 9 rating possess a 79.1% chance of being higher one year later. Conversely, those with the lowest 1,2, or 3 ratings have shown to simply be too volatile, thus risky for prudent long term investment. Due to the extreme volatility of the low rated stocks, of course, several will outperform, sometimes returning many fold percentages. However, 65% have been proven to lose money over a year time period. In fact, they lost an average of 5% of the year timeframe. Our studies clearly indicate that conservative, long term investors should avoid stocks with low Power Ratings and build a portfolio of those with high ratings. Let's take a closer look at 3 of the top rated stocks today. JM Smucker (SJM | Quote | Chart | News | PowerRating) - This packaged food company, perhaps best known for its jams and jellies, has earned a 10 Long Term PowerRating. It is the number one ranked stock on our most popular list today. In the early 2000's, they bought the JIF and Crisco brands from Proctor & Gamble giving the company leading positions in 7 food categories. They just added Folgers's Coffee to their portfolio which has been ultra successful so far. The fiscal fourth quarter was tremendous with an 81% increase in net sales, doubling of net income, a 19% increase in EPS and they increased fiscal 2010 estimates. A dividend of 35 cents/share was paid on September 1st. Richard Smucker, CEO, stated that they expect to continue to deliver long term growth and shareholder value. On the chart, price has been uptrending since May 1st and is trading above the 50 and 20- day SMAs. Price gapped higher to $55.00 plus/share then quickly dropped back to the 50-day SMA and has since bounced back forming a crude triple top.
Microsoft (MSFT | Quote | Chart | News | PowerRating) - This king of software companies is the second highest ranked stock on our most requested screener today with an 8 Long Term Power Rating. It has been creeping higher over the last several weeks. They are best known for the monster success of the Windows operating system and their founder Bill Gates. This fiscal year, ending in June, the major fundamental metrics were down across the board. However, they did up the dividend 7 cents. Technically, shares have been uptrending since mid June. However, they have exhibited a series of erratic bursts, gaps and falls during this time. $26.00/share appears to be solid technical resistance with price approaching this figure once again. Support appears at $24.00/share at the 50-day SMA.
Abbott Labs (ABT | Quote | Chart | News | PowerRating) - This old PowerRating favorite has earned a position as the third highest ranked stock on the most popular screener with a 7 Long Term PowerRating. They just reported a 10.1% increase in worldwide sales, an annual EPS growth of 14.0% and nine new regulatory approvals for 2008. The company reconfirmed a strong outlook for earnings in 2009. They just declared their 343 consecutive quarterly dividend and have several exciting products in the pipeline for approval and or release. Technically, price is above the 50-day Simple Moving Average and is currently hitting resistance at the 200-day SMA at $47.00/share.
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. Click the link above or call us at 888-484-8220 extension 1 to get your copy of the "5 Secrets to Successful Stock Investing" today! David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.
Contact us Toll-free 1-888-358-1193 Outside the U.S. please call 1-201-680-7112
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