Looking for stocks whose fortunes as investments have improved as of Friday's close? Our 5 PowerRating Upgrades for Investors column is always a great place to start.
For many - if not most - stocks become more attractive as they move higher. Never mind that this is a relative rarity in most people's economic lives. Never mind that most things that we buy in life become more attractive as their price goes down, rather than up. Tell a friend that Stock ABC is up 10% over the past few days and see if you can't see the investment gears starting to spin in their heads.
That kind of thinking is in large part what a bull market can do to you. When stocks are moving higher and higher and higher, investors and traders often can't help themselves but be all the more seduced into buying the higher the stocks go. People who never even considered buying a stock in sector X will come up with reasons to do so once the stocks in sector X are soaring to new highs day after day.
Hawaiian Electric Industries (HE | Quote | Chart | News | PowerRating) Long Term PowerRating Upgrade: 9 from 8
This is why our Long Term PowerRatings upgrades might seem a little peculiar to newcomers. One of the first things that many investors and long term traders notice is that the Long Term PowerRating of stocks tends to go up as the stocks go down. And, at the same time, the Long Term PowerRatings of stocks tends to go down as the stocks go up.
Aon Corporation (AOC | Quote | Chart | News | PowerRating) Long Term PowerRating Upgrade: 8 from 7
Why? The short answer to the question of our Long Term PowerRatings is this: we look to buy low and sell high. And when stocks with track records of strong growth and financial performance move lower, we find those stocks more attractive rather than less attractive. Often these stocks are good, strong stocks that have come under either profit-taking or simply surprising bad news that caused traders to overreact and dump shares they might have otherwise kept.
Beckman Coulter Inc. (BEC | Quote | Chart | News | PowerRating) Long Term PowerRating Upgrade: 8 from 7
One of the best ways to determine when this overreaction has begun is to watch for changes in stock's Long Term PowerRatings that are listed in our Today's PowerRatings Upgrades page. When investors see the Long Term PowerRatings of stocks tick up a point or two, they can know that these stocks are ones that the market has started to neglect - or downright dislike. And these are the stocks that are tossed aside that savvy investors know often have the potential to surprise to the upside in a year's time.
Burlington Northern Santa Fe (BNI | Quote | Chart | News | PowerRating) Long Term PowerRating Upgrade 8 from 7
Four of the stocks in today's report have had upgrades in their Long Term PowerRatings form 7 to 8, with the fifth stock moving from 8 to 9. Our research tells us that stocks with Long Term PowerRatings of 8 have been higher one year later more than 74% of the time. Stocks with Long Term PowerRatings of 9 have been even better investments after one year, being higher one year later more than 79% of the time.
Coca-Cola Enterprises (CCE | Quote | Chart | News | PowerRating) Long Term PowerRating Upgrade 8 from 7
The average stock, by comparison, has been higher one year later less than 68% of the time. Once again, the advantage goes to the high Long Term PowerRating stock.
Looking for more long-term solutions to your investing problems? Don't let the volatility of this market lead you to miss out on stocks you'll be glad to have bought a year from now.
Learn what you need to know as an active investor looking to invest in companies with a history of financial strength and a track record for growth. Click the link above or call us at 888-484-8220 extension 1 to get your copy of the "5 Secrets to Successful Stock Investing" today!
David Penn is Senior Editor of PowerRatings.net.
