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Markets & Finance

Stocks to Defy the January Barometer


By Michael Kaye By now, most investors have probably heard of the January Barometer. That market predictor says if the S&P 500-stock index rises in January, the index usually goes on to post a full-year gain. Our colleague Sam Stovall has written about this effect as it applies to S&P sectors (see BW Online, 02/03/03, "January's Glum Precedent for the Year"). We thought we'd take it one step deeper, to zero in on individual stocks.

So we set out to look for quality issues that posted a strong performance in January. We screened our database for stocks that had double-digit returns in January despite the S&P 500's decline of 2.75%. Then we added one more criterion. From that list, we looked for those issues ranked 4 STARS (accumulate) or 5 STARS (buy) by Standard & Poor's analysts, meaning they're expected to outperform the overall market over the next 6 to 12 months.

These 21 names emerged:

Company Name/ Ticker

STARS Ranking

AirTran (AAI)

4

Amsurg (AMSG)

4

Applebee's (APPB)

5

Barr Labs (BRL)

5

Biovail (BVF)

4

Career Education (CECO)

4

Check Point Software (CHKP)

4

Cytyc (CYTC)

4

El Paso Energy Partners (EPN)

4

Estee Lauder (EL)

4

Fair, Isaac (FIC)

5

Lear (LEA)

5

Liberty Media (L)

4

Mentor Graphics (MENT)

4

Mylan Labs (MYL)

4

Oracle (ORCL)

4

Rockwell International (ROK)

4

Steel Dynamics (STLD)

4

Symantec (SYMC)

5

U.S. Physical Therapy (USPH)

4

Western Digital (WDC)

4

Kaye is a portfolio services analyst for Standard & Poor's


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