Markets & Finance

S&P Top Ten Calls on Intrado


On Sept. 10, 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. S&P replaced medical-device maker Boston Scientific (BSX) with Intrado (TRDO), a leading provider of U.S. "911" emergency response infrastructure for both wireline and wireless telecom networks (See BW Online, 9/8/03, "Where Emergency Calls Are Welcome").

Boston Scientific left the portfolio after S&P analyst Robert Gold downgraded the stock's investment ranking to 4 STARS (accumulate) from 5 STARS (strong buy) on Sept. 9. (All the stocks in the portfolio are ranked 5 STARS.) Gold cited regulatory risks to the company's stent products and increased concerns over a possible price battle with rival Johnson & Johnson (JNJ),which led him to reduce his 12-month target price for the stock to $68 from $75.

Meanwhile, S&P analyst Todd Rosenbluth believes that Intrado will be a primary beneficiary of several regulatory trends, which should help boost profit growth. He also sees greater demand for Intrado's mass-disaster notification services. Based on a blend of ~~discounted cash-flow

Year-to-date through Aug. 29, the S&P Top Ten portfolio gained 24.42% vs. an advance of 15.95% for its benchmark, the S&P 500-stock index (both of these performances include dividends).

Here's the latest list:

S&P Top 10 Portfolio

Company

Price

(9/10/03 close)

12-Month Target

Investment Rationale

Comcast (CMCSA)

30.36

37

Increasing synergies from broadband acquisition

Compass Bancshares (CBSS)

34.76

41

Valuation, positive fundamental trends

Corinthian Colleges(COCO)

54.21

65

See extended growth period; undervalued

DR Horton (DHI)

29.49

38

Better-than-expected industry trends

Fair Isaac (FIC)

59.62

68

Attractive valuation

Flextronics (FLEX)

13.65

15

Firming business, low valuation

Intel (INTC)

27.66

38

Recovery in worldwide chip demand expected to drive growth

Intrado (TRDO)

21.01

30

Regulatory trends should help

boost profits

Jacobs Engineering (JEC)

47.09

55

See strong bookings from refining customers

Martek Biosciences(MATK)

52.57

59

Annual revenue growth of nearly 100% seen through fiscal 2004

For more information about the Top 10 portfolio, please visit http://www.businessweek.com/investor/content/jun2002/pi20020617_8998.htm By Ken Shea and Robert Gold


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