PowerRatings Across The Indexes: VZ, JNJ, AAPL, TEVA, WYE, CPB

Stocks roared to life yesterday, surging across the board on good positive earnings and stronger than expected economic news. Today, mixed messages from the housing front with a drastic drop in apartment construction offset by an increase in single family home building.

In my opinion, this is a very bullish sign due to the simple fact of dollar per unit spent is higher on single family homes and builders may be shifting their resources into the higher dollar construction per unit indicating optimism at this core level. Stocks are slightly higher across the board this morning after an earlier sell off on the housing data and news of 600 banks failing the stress test.

Even though I strongly believe that the bulls are back in control, this is a very difficult market. Proven tools are needed by long term investors to choose stocks most likely to outperform over the longer term. Our Long Term PowerRatings are one such dynamic tool. This tool fills the niche by being built upon 13 years of extensive, statistically valid studies across most market conditions. Our studies indicate that stocks earning a 10 Long Term PowerRatings have an 81% chance of being higher one year later. Those with a 9 rating possess a 79.1% chance of trading higher one year later. Conversely, stocks that are awarded low ratings of 1 or 2 have clearly shown to be simply too volatile and risky for prudent, conservative long term investors. You can clearly see the statistical advantage in building a long term portfolio consisting of 9 and 10 rated stocks, while avoiding the lower ratings. Interestingly, the Long Term PowerRatings are starting to increase across the board signaling the worse may be over.

Here are several Long Term PowerRated stocks from each of the 3 major indexes that may be worth a deeper look:

DJIA:

Verizon Communications (VZ | Quote | Chart | News | PowerRating) - A global leader in broadband, wireless, and wired line communications. They serve over 86 million customers and have revenues over $97 billion. The company has earned a 6 Long Term PowerRatings and turned in solid first quarter results in 2009. Cash flow from operation was up over 19%, EPS up slightly, and operating income grew by 11%. Increases in the wireless subscriber base are most impressive with a 29% increase. Technically, interestingly the 50 and 200-day SMA's are at the same level of 30.35 and are about to cross over. Support appears at $29.50/share with price below both SMA's currently.

Johnson & Johnson (JNJ | Quote | Chart | News | PowerRating) - The number one ranked company in the DJIA earning an 8 Long Term PowerRatings. In April, the major drug maker, announced a 6.5% dividend increase. 1st quarter results indicate declines across the major fundamental metrics. Sales were down 7.2%, negative currency impact of 12.6% and Net Earnings took a 2.5% hit. However, EPS matched last year at $1.26 and the company reconfirmed its earning guidance of $4.45 to $4.55/share for 2009. The CEO, William Weldon, sounded very optimistic about 2009 despite the slightly negative results. On May 19th, the company is hosting a conference with analysts regarding its new NEVO stent product. This is likely good news, but only time will tell for sure. Technically, price has burst our above the 50-day SMA and is hitting resistance at $56.00/share. The 200-day SMA is resting at 58.75 and is the next hard technical resistance level.

Nasdaq 100

Apple (AAPL | Quote | Chart | News | PowerRating) - This innovative computer company has earned a 5 Long Term PowerRatings. The first quarter of 2009 was stellar with record revenues and profits. Over 4 million iPhones and more than 22 million iPods were sold in the quarter representing 88% and 3% unit growth respectively. On the charts, price surged above both the 200 and 50-day SMA's, however hitting resistance around $135.00/share. Price dropped back to $120.00 where it found support and has since bounced back toward resistance at $135/share.

Teva Pharma (TEVA | Quote | Chart | News | PowerRating) - This stock remains the number one ranked stock in the Nasdaq index with a 7 Long Term PowerRatings. The firm is headquartered in Israel and is the world's largest maker of generic drug products. First quarter 2009 results have been very strong with a 22% increase in Net Sales and a 4% improvement in GAAP income. This is despite negative US Dollar strength adversely effecting sales. Technically, price is above both the 50 and 200-day SMA's but is finding resistance at $45.50/share

S&P 500

Wyeth (WYE | Quote | Chart | News | PowerRating) - A global pharmaceutical concern earning an 8 Long Term PowerRatings. The first quarter resulted in a net revenue decrease of 6%. However, if one removes the negative foreign exchange impact, they increased by 2%. Strong sales from core product franchises provided the company a strong start into 2009. The charts reflect the optimism with shares being in an uptrend since April 27th. The 50-day SMA is above the 200-day SMA at 42.68 and 38.81 respectively.

Campbell Soup (CPB | Quote | Chart | News | PowerRating) - The number one listed stock in the index with an 8 Long Term PowerRatings. Unfortunately, the fiscal second quarter lagged a bit due to commodity hedging losses, tax adjustments, and currency issues. However, they gave positive guidance into the rest of 2009 with EPS growth expected to be at the high end of 5-7%. Technically, shares have bounced off of the lows in the $24.50 range and have broken resistance at the 50-day SMA. The next technical resistance appears at $27.50/share.

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David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.