Markets & Finance

S&P PowerPicks Trail "500" in September


By Ken Shea S&P PowerPicks -- a portfolio of analysts' top picks for all of 2001 -- underperformed its benchmark, the S&P 500 index, in September. PowerPicks posted a loss of 12.5% versus a loss of 8.2% for the "500," as drubbings in stocks such as Host Marriott (-45%), Xilinx (-40%), and Rational Software (-40%) more than offset gains in Scholastic (+12%) and Allstate (+10%).

On a year-to-date basis, S&P PowerPicks now trails "500" by tally of -24.9% versus -21.2%. Through Sept. 30, 19 of the portfolio stocks beat the S&P 500, while 14 did not.

S&P's PowerPicks Portfolio for 2001

Company

Reason

AK Steel Holding (AKS)

6% yield, low p-e offers good total return potential

Allstate (ALL)

Steady EPS growth, low p-e

Avery-Dennison (AVY)

Steady EPS grower, attractive valuation

BJ's Wholesale Club (BJ)

Steady, high-teen annual EPS growth seen

BJ Services (BJS)

To benefit from rising oil, natural gas drilling

Citigroup (C)

Broad business base offers steady growth

Cephalon (CEPH)

High-potential pipeline, attractive valuation

Comcast (CMCSK)

Strong cash flow growth, attractive valuation

Cisco Systems (CSCO)

Rapid growth of networking equipment

CVS (CVS)

Strong EPS growth seen continuing

Dynegy (DYN)

Strong growth seen continuing for major IPP

HEALTHSOUTH (HRC)

Major operational turnaround underway

Host Marriott (HMT)

8% yield, low p-e offers good total return potential

ITT Ind. (ITT)

Steady EPS growth seen; low p-e

JDS Uniphase (JDSU)

Capturing growth of optical component market

Kaydon (KDN)

Steady EPS growth, attractive valuation

Kinder Morgan (KMI)

Sizable natural gas assets, strong EPS growth

Lehman Bros. (LEH)

Low p-e, takeover kicker

Macromedia (MACR)

Strong demand for applications software

Millipore (MIL)

Strong orders seen driving 20% EPS growth

Philip Morris (MO)

Improving business environment, low p-e

Pfizer (PFE)

Strong drug pipeline seen driving 25% EPS growth

Rational Software (RATL)

Strong demand for e-business, Internet software

Renal Care Group (RNCG)

EPS rising for leading dialysis services provider

Sanmina (SANM)

To benefit from growing contract manufacturing sector

Scholastic (SCHL)

Attractive valuation to growth prospects

Seitel (SEI)

Strong demand for oil exploration equipment

TXU Corp. (TXU)

5% yield, low p-e offers good total return potential

Tyco Int'l (TYC)

Internal growth, steady acquisitions driving growth

US Freightways (USF)

Low p-e for diversified transport services provider

Vodaphone Group (VOD)

Leading global wireless communications company

Watson Wyatt (WW)

Good EPS gains seen for major benefits consultant

Xilinx (XLNX)

Leading maker of programmable logic devices

For more information on the S&P PowerPicks portfolio, please visit http://www.businessweek.com/investor/content/jan2001/pi2001011_250.htm Shea is equity research director of Standard & Poor's


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