NEW YORK, May 13, 2011 /PRNewswire/ -- Standard &
Poor's Equity Research believes that U.S. stocks are in an extended
bull market characterized by high profit margins, projected record
high earnings, modest valuations, and slow but sustained economic
improvement from depressed levels, according to the latest issue of
the group's Quality Trends publication.
"With valuation premiums on high Quality Ranking (QR) issues
versus low QR issues compressed, we recommend increased focus
on high QR stocks," said Richard
Tortoriello, a S&P equity analyst and author of the
report. "Our data show that investors' appetite for riskier
securities is diminishing. Both U.S. and International
Quality Rankings show a marked decline in low Quality
outperformance over the 12 months ending March 31, 2011."
This issue of Quality Trends also looks at International
Quality Rankings (IQRs), which rank nearly 18,000 companies in over
100 countries. The report provides a list of A+ ranked issues
globally, a list of select high IQR companies in Brazil and China, and a screen of high IQR issues with
high ROE and low price-to-book value.
The report includes three different high QR strategies:
- A strategy based on Quality Scores, the numerical scores
underlying the Quality Rankings. This strategy looks for the
top stocks by 6-month change in both earnings and dividend Quality
Scores and then selects the lowest valuation stocks, by enterprise
value-to-EBITDA.
- A dividend yield, dividend growth, and free cash flow yield
strategy that seeks to identify high-yielding companies with strong
cash flow that are using cash to grow dividends.
- A strategy based on buying defensive stocks (staples, health
care, utilities) during the seasonally weak May-October period and
cyclical stocks during the seasonally strong November-April period.
The strategy employs our QScore sector-based multi-factor
models to provide a list of high QR defensive stocks that may be
attractive for purchase.
The top-ten largest market capitalization high QR companies
identified in the screens are: General Electric (NYSE: GE:
$20); Comcast (NASDAQ: CMCSA:
$26); Walgreen (NYSE: WAG:
$43); Lockheed Martin (NYSE: LMT:
$79); Encana (NYSE: ECA:
$33); Johnson & Johnson (NYSE:
JNJ: $66 ); Wal-Mart Stores (NYSE:
WMT: $56); Colgate-Palmolive
(NYSE: CL: $85); Express
Scripts (NASDAQ: ESRX: $60);
and UnitedHealth Group (NYSE: UNH: $51).
The report can be purchased by calling
1-877-219-1247.
About Standard & Poor's Equity Research Services
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research, Standard & Poor's licenses its research to global
institutions for their investors and advisors. Standard &
Poor's team of experienced U.S., European and Asian equity analysts
use a fundamental, bottom-up approach to assess a global universe
of equities across industries worldwide. Follow Standard
& Poor's equity analysts' U.S. market commentary each day at
http://www.equityresearch.standardandpoors.com/.
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Disclosures
The strategies discussed herein are based on quantitative
methodologies which are different from the qualitative and
subjective rankings of the Standard & Poor's STock Appreciation
Ranking System (STARS). Because the quantitative methodologies and
the STARS methodology reflect different criteria, assumptions and
analytical methods, quantitative evaluations may at times differ
from or even contradict STARS recommendations. Strategies discussed
herein are model portfolios only, presented as a general guideline
and are not collective investment funds. Assets managed in
accordance with the strategies may lose money. All information
provided by Standard & Poor's is impersonal and not tailored to
the needs of any person, entity or group of persons. Past
performance is no indication of future results. Standard &
Poor's and its affiliates provide a wide range of services to, or
relating to, many organizations, including issuers of securities,
investment advisers, broker-dealers, investment banks, other
financial institutions and financial intermediaries, and
accordingly may receive fees or other economic benefits from those
organizations, including organizations whose securities or services
they may recommend, rate, include in model portfolios, evaluate or
otherwise address. This material is not intended as an offer or
solicitation for the purchase or sale of any security or other
financial instrument. Securities, financial instruments or
strategies mentioned herein may not be suitable for all investors.
Any opinions expressed herein are given in good faith, are subject
to change without notice, and are only current as of the stated
date of their issue. Prices, values, or income from any securities
or investments mentioned in this report may fall against the
interests of the investor and the investor may get back less than
the amount invested. Where an investment is described as being
likely to yield income, please note that the amount of income that
the investor will receive from such an investment may fluctuate.
Where an investment or security is denominated in a different
currency to the investor's currency of reference, changes in rates
of exchange may have an adverse effect on the value, price or
income of or from that investment to the investor. The information
contained in this report does not constitute advice on the tax
consequences of making any particular investment decision. This
material does not take into account your particular investment
objectives, financial situations or needs and is not intended as a
recommendation of particular securities, financial instruments or
strategies to you nor is it considered to be investment advice.
Before acting on any recommendation in this material, you should
consider whether it is suitable for your particular circumstances
and, if necessary, seek professional advice.
This material is based upon information that we consider to be
reliable, but neither S&P nor its affiliates warrant its
completeness, accuracy or adequacy and it should not be relied upon
as such. Assumptions, opinions and estimates constitute our
judgment as of the date of this material and are subject to change
without notice. Neither S&P nor its affiliates are responsible
for any errors or omissions or for results obtained from the use of
this information. Past performance is not necessarily indicative of
future results.
For more information contact:
Marc Eiger, Communications, Tel.:
212-438-1280
marc_eiger@standardandpoors.com
SOURCE Standard & Poor's