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|  | JANUARY 23, 2006
 S&P TOP TEN PORTFOLIO By Kenneth Shea, Steve Biggar, and Robert Gold Cimarex Gushes Into the S&P Top 10S&P adds the oil and gas exploration outfit to replace Bank of America in its portfolio of favorite stock ideasOn Jan. 23, Standard & Poor's Equity Research Group made changes to the S&P Top Ten Portfolio -- those stocks it considers to be the best candidates for capital gains over the next 6 to 12 months. S&P added Cimarex Energy (XEC , recent price: $47) to replace Bank of America (BAC , $44). S&P continues to favor Cimarex's approach to oil and gas exploration, which we see as a disciplined method of evaluating geological formations and risk assessment. S&P believes Cimarex's drilling prospects provide substantial opportunities to increase its reserves and production levels. S&P views the valuation for Cimarex shares as attractive at a current level of less than 10 times S&P's revised earnings per share estimate for 2006 of $4.89. Our 12-month target price is $60, which implies an approximate 26% upside potential from current levels. Cimarex is a member of the S&P SmallCap 600 index. About the S&P Top Ten A dynamic model portfolio concept, the S&P Top Ten was launched on Dec. 31, 2001. From inception through Dec. 31, 2005, it gained 23.9%, vs. 16.61% for the S&P 500 index on a total return basis. For all of 2005, the S&P Top Ten rose 2.8%, vs. a total return of 4.91% for the S&P 500. On Oct. 26, 2005, the Senior Portfolio Group within the S&P Equity Research Group modified the selection process associated with the construction of the S&P Top Ten Portfolio concept. Effective on that date, stocks in the portfolio that have been downgraded to 4 STARS (buy) can remain in the portfolio if the committee believes that the fundamentals are sufficiently intact despite the S&P analyst's modified stance. Here's the S&P Top Ten list:
 Shea is director of Global Equity Research, Biggar is director of U.S. Equity Research, and Gold is senior portfolio group analyst, for Standard & Poor's Equity Research All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
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