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http://www.businessweek.com/stories/2005-01-19/st-dot-jude-medical-moves-into-s-and-p-top-10

Markets & Finance

St. Jude Medical Moves into S&P Top 10


By Kenneth Shea, Robert Gold, and Steve Biggar On Jan. 20, Standard & Poor's Equity Research Group made changes to the S&P Top 10 portfolio -- those issues it considers to be the best candidates for capital gains over the next 6 to 12 months. We at S&P added St. Jude Medical (STJ

; recent price: $39) to the portfolio, replacing Qualcomm (QCOM

; $38).

Liker all stocks in the S&P Top 10, Cooper carries S&P's top investment ranking, 5 STARS (strong buy). While it has exited the portfolio, Qualcomm retains its 5-STARS recommendation.

The inclusion of St. Jude reflects our belief that the company is well positioned to capitalize on rising cardiac defibrillator implantations in the U.S. We believe the eligible patient pool for these devicess will double, aided by

favorable clinical data that should boost physician demand and raise Medicare reimbursements.

Our 12-month target price on St. Jude is $55, based on a forward p-e-to-growth (PEG) ratio of 1.5, in line with its industry peers.

For all of 2004, the S&P Top Ten rose 19.2%, vs. a gain of 10.9% for its benchmark, the S&P 500 index (both on a

total return basis).

Here's the latest list:

S&P TOP 10 PORTFOLIO

Company

Ticker

Price (1/20/05 close)

12-Month Target

Investment Rationale

Amgen

AMGN

63

80

Attractive valuation

Burlington Northern

BNI

46

54

Strong market share, rising shipping volume

Chattem

CHTT

33

43

Strong consumer product portfolio

Cooper Cos.

COO

75

86

See gain in market share

FMC Corp.

FMC

45

54

Improving profit outlook

Guitar Centers

GTRC

54

68

Attractive valuation

Ingersoll-Rand

IR

75

95

Expected improvements in several end markets

Landstar System

LSTR

37

44

High returns on assets and equity

MBNA

KRB

27

32

Strength in consumer lending

St. Jude Medical

STJ

38

55

Positive ICD market data

For more information about the Top 10 portfolio, please visit http://www.businessweek.com/investor/content/jun2002/pi20020617_8998.htm Shea is director of global equity research, and Gold and Biggar are senior portfolio group analysts, for Standard & Poor's Equity Research


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