PowerRatings Best of the Requests: ARB, BNI, EW, PG, CNP
This week’s edition of PowerRatings Best of the Requests is a veritable family reunion of high Long Term PowerRatings stocks we have been urging active investors to learn more about over the past few weeks. Ranging from media and advertising services companies to health care, and from personal products corporations to diversified utilities, the stocks in today’s report offer something for almost every type of investor or long term trader.
Arbitron [ARB@ARB], with its Long Term PowerRating of 9 and its industry PowerRating of 7 is one example of the sort of stocks that we have been highlighting – and that investors have started learning more about.
We pointed investors in Arbitron’s direction back on Wednesday, June 4th as part of our Featured Stock Spotlight. In the two weeks since we last reported on Arbitron, the stock has managed to maintain its Long Term PowerRating of 9, but has seen its Industry PowerRating slip significantly from 10 to 7. Despite this, the stock’s high Long Term PowerRating and still-above-average industry PowerRating make the stock worth watching for investors looking to land off-the-beaten-path stocks to their portfolios.
Another stock that we have been fond of in recent weeks is Burlington Northern Santa Fe [BNI@BNI]. Burlington Northern Santa Fe was among a number of railroad stocks that had caught the eye of billionaire investor, Warren Buffett, who reportedly had several large positions in railroad stocks like BNI, among others.
We last looked at Burlington Northern Santa Fe on Monday, June 9th as part of a discussion on stocks that had received Long Term PowerRatings upgrades. At the time, BNI had earned an upgrade from 8 to 9, and it is a PowerRating of 9 that the stock still has today.
What has changed is the stock’s Industry PowerRating, which is down just one point from a 7 to a 6. That said, the industry remains home to more than one high, Long Term PowerRating stock in the form of CSX Corp [CSX@CSX], which has a Long Term PowerRating of 8.
Also on the list of PowerRatings upgrades that noted BNI was Edwards Life Sciences [EW@EW]. Edwards Life Sciences, like Burlington Northern, was also receiving an upgrade from 8 to 9, helping move the stock into that category of truly elite potential trading opportunities. Recall that stocks with Long Term PowerRatings of 9 have been higher one year later more than 79% of the time, based on our historical research. 9-rated stocks have also tended to outperform the average stock, averaging gains of more than 18% in a year’s time, compared to 12-13% for the average stock.
It should be pointed out that Edwards Life Sciences shares top billing in the Medical Appliances and Equipment industry with 8-rated Medtronic [MDT@MDT].
If there is a stock that sits at the head of the table in this PowerRatings family reunion of high Long Term PowerRatings stocks, then that stock might very well be Procter & Gamble [PG@PG]. We last looked at Procter & Gamble Tuesday, June 10 as part of a look at the highest Long Term PowerRatings stocks in the Dow Jones industrials.
Interestingly, while other stocks in today’s report have been a part of industries that had experienced PowerRatings downgrades in recent days, Procter and Gamble’s industry – Personal Products – has actually had an Industry PowerRatings upgrade from 8, when we last wrote about PG, to a 9 as of Wednesday’s close. 9-rated industries, recall, have achieved annualized average returns of 18.02% from 1995 to 2007 according to our historical testing. Compare that to the average stock, which produced annualized average returns of approximately 14% over the same time period.
If there is one industry group into which investors could toss a dart and likely hit a high Long Term PowerRating stock, then there’s a good chance that industry group would be diversified utilities.
You might never guess it – given the fact that the industry group has a perfectly average Long Term PowerRating of 6. But take a closer look inside the world of diversified utilities and you’ll find an industry group with 5 stocks that have Long Term PowerRatings of 9 and 8 stocks with Long Term PowerRatings of 8.
Centerpoint Energy [CNP@CNP] was the utility that investors were looking to learn more about over the past 24 hours. The stock is one of those numerous 8-rated names in a “loaded” utilities industry that has actually experienced an industry PowerRating down grade over the past several weeks from the 10 it had at the end of April to the 6 that diversified utilities currently has.
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David Penn is Senior Editor at PowerRatings.net.