By Ken Shea The S&P PowerPicks 2002 portfolio -- representing S&P analysts' top picks for the year -- outperformed its benchmark, the S&P 500 index, in September, based on preliminary data. The portfolio declined 8.5% on the month, vs. the index's drop of 11.0%. Year to date through Sept. 30, the portfolio is ahead of the "500" by a tally of -27.5% vs. -29.0%.
The portfolio's top-performing issues in September were UTStarcom (+16%), Quest Diagnostics (+10%), and Steel Dynamics (+8%). But strength in these issues was offset by large declines in Peregrine Systems (-80%), Siebel Systems (-32%), and Flextronics (-26%).
Year to date through Sept. 30, 20 of the Portfolio stocks beat the "500", while 17 did not.
About the S&P PowerPicks 2002 Portfolio
The Portfolio represents the collective "best ideas" of the Standard & Poor's equity research staff.
Each of the 35 industry analysts on S&P's equity research staff has chosen one of the stocks they follow as the best-positioned for superior growth. The S&P PowerPicks 2002 Portfolio is diversified across all the 10 S&P economic sectors comprising the S&P 500 index.
The portfolio is a "frozen" one, meaning that it will undergo no changes throughout the entire year. The objective of the portfolio is to exceed the total return (capital appreciation plus dividends paid) generated by the S&P 500 during the year.
Mkt Cap $Bil. (12/31/01)
American International Group
Improving property-casualty premium rates
Strong demand for biopsy testing
Strong drug product pipeline
Leader in orthopedic devices enjoying robust growth
Growth in sales of Provigil neurological disorder treatment
Successfully leveraging its women's casual clothing market niche
Increased need for risk assessment services
Improving product mix seen fueling mid-teen EPS growth
Seen as beneficiary of improving economy. 3%+ yield, takeover kicker
Improvement in online advertising market
Ground business seen picking up as economy strengthens
Strong demand for ion and electron-beam microscopes
Expected improvement in improved equity market environment
Improving demand for outsource manufacturing
Steady EPS grower seen benefiting from recovery in home improvement division
Global Santa Fe
World's second largest offshore driller increasing market presence.
Capitalizing on growing trend toward e-business solution deployments
More focused product mix, recovering fertilizers industry conditions
Rising market share of fragmented mortgage lending industry
Diversified industrial products company seen beneficiary of improving economy
Owner of attractive gas pipeline assets seen benefiting from improved prices
Anticipated rebound in consumer spending, lower funding costs
Maker of microcontrollers seen benefiting from industry upturn in '02
Favorable interest rate envionment, attractive business model
Attractive valuation relative to wireless carrier peers
Improving packaging product demand
Park Place Entertainment
See improved gaming industry conditions, rising free cash flow
See growing demand for co.'s infrastructure resource management
Favorable demographic trends for diagnostic testing
Streamlining product mix, low valuation
New Siebel 7 product release seen spurring growth
Low cost minimill seen benefiting from reduced steel industry capacity
Regulated electic utility generating good, steady EPS growth, 5% yield
Focus on recurring and service revenues generating steady EPS gains
Robust capital spending growth in China's telecom market
For more on the S&P PowerPicks 2002 portfolio, please visit
http://www.businessweek.com/investor/content/dec2001/pi20011230_3972.htm Shea is U.S. equity research director for Standard & Poor's