Markets & Finance

A Solid October for PowerPicks


By Ken Shea and Robert Gold The S&P PowerPicks 2004 portfolio -- representing S&P analysts' top picks for the year -- ended October in a dead heat with its benchmark, the S&P 500-stock index. For the month, both the portfolio and the S&P 500 generated a total return of 1.5%, both including dividends.

The portfolio's top performers on the month were led by Intrado (TRDO), up 33.9%; Landstar Systems (LSTR), up 15.8%; and Reliant Energy (RRI), up 10.2%, bounding back smartly from a 6.3% drop in the previous month. Also posting strong performances: Viacom (VIA.B), up 8.7%, and Omnicom (OMC), up 8%.

October's PowerPicks laggards included included America

West (AWA), down 15.2% (its second straight month of double-digit declines); Indymac Bancorp (NDE); down 10.9%, Smurfit-Stone Container (SSCC), down 10.4%; Flextronics (FLEX), down 9.1%; and Caremark Rx (CMX), down 6.6%.

Year-to-date through Oct. 29, the portfolio has beaten the S&P 500 in 5 out of 10 months but has lagged behind its benchmark with a total return of 2%, while the 500 gained 3.1%. Of the 40 portfolio stocks, 20 had beaten the index, while 20 had underperformed it.

Note: PowerPicks member Evergreen Resources was acquired by Pioneer Natural Resources (PXD) on Sept. 28. Evergreen was removed from the portfolio following the deal's closing. As a result, the Portfolio will hold only 39 stocks through yearend.

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 that make up the S&P 500 index.

The portfolio is a "frozen" one, meaning it will undergo no changes throughout the entire year. Its objective 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 Energy

RRI

1,815

NR

None

*Removed from the portfolio following its acquisition by Pioneer Natural Resources on Sept. 28.

For more on the S&P PowerPicks 2004 portfolio, see

"S&P Selects the Best of the Best". Shea is director of global equity research, and Gold a senior portfolio group analyst, for Standard & Poor's Equity Research Services


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