Markets & Finance

Changes Brewing for the S&P Top Ten


On Dec. 11, 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 generic drugmaker Barr Laboratories (BRL

; recent price, $76) with brewing giant Anheuser-Busch (BUD

; $52).

Like all the stocks in the portfolio, Anheuser-Busch carries S&P's highest investment ranking, 5 STARS (buy). Barr was removed from the portfolio after it was downgraded to 3 STARS (hold) from 5 STARS on Dec. 10.

Anheuser-Busch is the name behind well known beer brands Budweiser, Michelob, and Busch, and has other operations in entertainment, glass manufacturing, theme parks, and real estate. S&P is encouraged by favorable beer pricing trends which, along with anticipated market share gains in U.S. and abroad, are expected to drive a gain in estimated 2004 earnings per share of around 13%, to $2.79. Additionally, we

feel that likely investor rotation into higher quality names in 2004 will allow for some expansion of Anheuser's p-e multiple. Our 12-month target price for the stock is $63.

Year-to-date through Nov. 30, the S&P Top Ten portfolio climbed 39.4%, vs. a gain of 22.3% 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

(12/11/03 close)

12-Month Target

Investment Rationale

Affiliated Computer (ACS)

53.08

63

Long-term trend toward IT outsourcing

America West Holdings (AWA)

11.45

25

Outperforming peers; valuation

Anheuser-Busch (BUD)

52.40

63

Strong growth profile, market dominance

Comcast (CMCSA)

31.58

37

Increasing synergies from broadband acquisition

DR Horton (DHI)

40.76

56

Better-than-expected industry trends

Flextronics (FLEX)

14.61

21

Firming business, low valuation

Hologic (HOLX)

16,60

21

Cost controls and product focus; valuation

Intel (INTC)

30.91

45

Recovery in worldwide chip demand expected to drive growth

Landstar System (LSTR)

38.79

48

High returns on assets and equity

Lennar (LEN)

92.24

127

Favorable business model, sector strength

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


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus