PowerPicks Hit a Late-Summer Soft Patch

By Ken Shea and Robert Gold The S&P PowerPicks 2004 portfolio -- representing S&P analysts' top picks for the year -- trailed its benchmark, the S&P 500 index, once again in August. For the month, the portfolio posted a loss of 2.3%, vs. a gain of 0.4% for the "500", both including dividends.

A number of portfolio stocks turned in strong performances for the month, including Mylan Labs (MYL

), up 17.6%, America West (AWA

), up 8.6%, Millennium Pharma (MLNM

), up 6.9%, Citigroup (C

), up 5.7%, and Bear Stearns (BSC

), up 5.4%. In particluar, Mylan and America West were able to bounce back from significant losses in the prior month.

But stellar performances from the leaders weren't sufficient to lift the entire PowerPicks group. The overall portfolio was weighed down by losses in Corinthian Colleges (COCO

), down 39.3%, Open Text (OTEX

), down 14.9%, Analog Devices (ADI

), down 12.4%, Intrado (TRDO

), down 12.0%, and Nextel Partners (TRDO

), down 10.3%.

Year to date through Aug. 31, the portfolio has beaten the "500" in 4 of 8 months, but has lagged its benchmark with a 3.2% decline on a total return basis, while the "500" was up 0.4%. Of the 40 portfolio stocks, 21 had beaten the "500" while 19 had underperformed the index.

About the S&P PowerPicks 2004 Portfolio

The portfolio represents the collective "best ideas" of the Standard & Poor's equity research staff.

Each of the most senior 40 industry analysts on S&P's equity research staff has chosen one of the stocks they follow as the best-positioned for superior growth. The S&P PowerPicks 2004 Portfolio is diversified across all the 10 S&P economic sectors comprising the S&P 500 index.

The portfolio is a "frozen" one, meaning it will undergo no changes throughout the entire year. The objective of the portfolio is to exceed the total return (capital appreciation plus dividends paid) generated by the S&P 500 index during the next 12 months.

Sector/Company

Ticker

Market Cap $bil.

S&P Earns. & Div. Rank

S&P Index

CONSUMER DISCRETIONARY

Comcast Class A

CMCSA

71,052

C

500

Fortune Brands

FO

10,091

B-

500

Gannett

GCI

23,755

A

500

La Quinta

LQI

901

C

None

Omnicom

OMC

15,857

A+

500

Quicksilver

ZQK

944

B+

600

Viacom Class B

VIA.B

67,380

B-

500

CONSUMER STAPLES

Constellation Brands

STZ

3,471

B+

400

PepsiCo

PEP

83,262

A

500

Sysco

SYY

23,284

A+

500

ENERGY

ENSCO Intl.

ESV

3,957

B

400

Evergreen Resources

EVG

1,316

B-

600

Exxon Mobil

XOM

243,108

A-

500

FINANCIALS

Bear Stearns

BSC

7,142

A

500

Citigroup

C

240,291

A+

500

Commerce Bancorp

CBH

3,915

A

400

Hartford Financial Services

HIG

16,139

B

500

IndyMac Bancorp

NDE

1,666

B+

400

MBNA

KRB

31,980

A+

500

HEALTH CARE

Caremark Rx

CMX

7,183

B-

None

Hologic

HOLX

317

B-

600

Millennium Pharmaceuticals

MLNM

4,727

NR

400

Mylan Labs

MYL

6,648

A-

400

Triad Hospitals

TRI

2,532

NR

400

INDUSTRIALS

America West Holdings

AWA

424

NR

None

Corinthian Colleges

COCO

2,517

NR

400

Kaydon

KDN

730

A-

600

Landstar

LSTR

1,083

B

600

Manitowoc

MTW

741

B

600

INFORMATION TECHNOLOGY

Analog Devices

ADI

17,322

B

500

Automatic Data Processing

ADP

23,099

A+

500

Cadence Design Systems

CDN

4,600

B-

400

Flextronics

FLEX

7,715

NR

None

IBM Corp.

IBM

155,900

B

500

Intrado

TRDO

1,083

NR

None

Open Text

OTEX

788

NR

None

MATERIALS

Smurfit-Stone Container

SSCC

4,486

B-

None

Sealed Air

SEE

4,517

NR

500

TELECOM SERVICES

Nextel Partners

NXTP

2,951

NR

None

UTILITIES

Reliant Resources

RRI

1,815

NR

None

For more on the S&P PowerPicks 2004 portfolio, please visit

http://www.businessweek.com/investor/content/dec2003/pi20031226_5517_pi071.htm Shea is director of global equity research, and Gold a senior portfolio group analyst, for Standard & Poor's Equity Research