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PowerRatings Best of the Requests: MDT, ALK, DBD
Thursday, October, 02 2008

In these uncertain economic times, having a proven stock picking method for your long term portfolio is all the more critical. Thursday's list of Long Term PowerRatings stocks includes Medtronics, a medical equipment maker who coveted an 8 rating. More >>
PowerRatings Upgrades: ORH, NSANY, SCHL
Monday, September, 29 2008

Today's PowerRatings upgrades includes Nissan Motor Company with a Long Term PowerRating of 6, representing one of the few relative success stories for car manufacturers in a sinking world economy. More >>
More Analysis >>
The Power of MO: PowerRating Upgrades for Investors
By David Penn
May 5, 2008   2:15 PM ET

Today's look at stocks with upgrades to their Long Term PowerRatings as of the Friday close puts the focus on Altria Group (MO | news | PowerRating | PR Charts ), the sole stock to have its PowerRating climb up out of the ranks of the merely average.

And while there are a number of other stocks that have earned upgrades to their Long Term PowerRatings - stocks like American Electric Power (AEP | news | PowerRating | PR Charts ) and PPL Corporation (PPL | news | PowerRating | PR Charts ) - Altria Group is unique in being the highest rated stock on our list of PowerRatings upgrades and the only one in the "consider buying" zone of stocks that active investors and long term traders should consider.

Take a look at the PowerRatings chart of Altria Group below. Note how the stock first had a Long Term PowerRating of 8 going into the first half of April as the stock moved back and forth above and below its 200-day moving average.

The stock's Long Term PowerRating shifted down one to a 7 in the second half of April. At the time, the stock was rallying from a low made below the 200-day moving average. The stock crossed the 200-day moving average briefly with its 7 PowerRating, but retreated swiftly, gapping back down below that level within two days.

Shares of Altria Group moved lower for four consecutive days, creating an increasingly oversold and increasingly volatile stock. Altria Group slipped from a late April high of about $22.60 to a low just under $20 in the first few days of May.

It was the rally off of these lows that marked the stock's turnaround from an average stock to an 8-rated stock.

What does it mean for a stock to earn a Long Term PowerRating of 8? Our research into long term stock price behavior between 1995 and 2007 indicates that stocks that have Long Term PowerRatings of 8 have been both more reliable and better performers compared to the average stock. Specifically, we found that 8-rated stocks were higher one year later more than 74% of the time. Compare this to the average stock, which was higher one year later less than 68% of the time.

In addition to this superior reliability compared to the average stock, 8-rated stocks have tended to outperform them, as well. We found that stocks with Long Term PowerRatings of 8 tended to gain, on average, more than 17% after one year. The average stock, on the other hand, tended to gain between 12 and 13% on average in a year's time.

This is why, when encouraging active investors and long term traders to add our Long Term PowerRatings to their trading and investing toolkits, we emphasize sticking with high Long Term PowerRatings stocks--those with Long Term PowerRatings of 8 or higher. These are the stocks with the sort of quantified edges that active investors should look for when building a stock portfolio.

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. Click here to get a copy of our special, Free Report on the "5 Secrets to Successful Stock Investing," and 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. Call us at 888-484-8220 to get your copy of the "5 Secrets to Successful Stock Investing" today.

David Penn is Senior Editor for PowerRatings.net.



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