PowerPicks Lag "500" in February

The best performers on the month were Constellation Brands, Chico's FAS, and Peregrine Systems

By Ken Shea

The -- representing S&P analysts' top picks for the year -- trailed its benchmark, the S&P 500 index, by a tally of -5.1% vs. -2.1% in February. Year to date through Feb. 28, the portfolio also lagged the "500," -4.6% vs. -1.4%.

Strong gains for Constellation Brands (+14%), Chico's FAS (+13%), and Peregrine Systems (+13%) were more than offset by steep losses in Andrx Group (-43%), NEXTEL Communications (-38%), and Flextronics (-35%).

Year to date through February 28, 20 of the Portfolio stocks beat the "500", while 15 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.

Company Mkt Cap $Bil. (12/31/01) Investment Rationale
American International Group 209.1 Improving property-casualty premium rates
Ameripath 0.9 Strong demand for biopsy testing
Andrx Corp. 4.9 Strong drug product pipeline
Biomet 7.8 Leader in orthopedic devices enjoying robust growth
Cephalon 3.4 Growth in sales of Provigil neurological disorder treatment
Chico's FAS 1 Successfully leveraging its women's casual clothing market niche
ChoicePoint 3.1 Increased need for risk assessment services
Constellation Brands 1.8 Improving product mix seen fueling mid-teen EPS growth
Cooper Industries 3.2 Seen as beneficiary of improving economy. 3%+ yield, takeover kicker
DoubleClick 1.5 Improvement in online advertising market
Fedex Corp. 14.3 Ground business seen picking up as economy strengthens
FEI Co. 1 Strong demand for ion and electron-beam microscopes
FleetBoston Financial 38.7 Expected improvement in improved equity market environment
Flextronics 12.5 Improving demand for outsource manufacturing
Fortune Brands 5.8 Steady EPS grower seen benefiting from recovery in home improvement division
Global Santa Fe 4.7 World's second largest offshore driller increasing market presence.
IBM 207 Capitalizing on growing trend toward e-business solution deployments
IMC Global 1.5 More focused product mix, recovering fertilizers industry conditions
IndyMac Bancorp 1.3 Rising market share of fragmented mortgage lending industry
Kaydon 0.6 Diversified industrial products company seen beneficiary of improving economy
Kinder Morgan 5.6 Owner of attractive gas pipeline assets seen benefiting from improved prices
MBNA Corp. 28.1 Anticipated rebound in consumer spending, lower funding costs
Microchip Technology 5.3 Maker of microcontrollers seen benefiting from industry upturn in '02
Moody's 5.7 Favorable interest rate envionment, attractive business model
Nextel Communications 8.3 Attractive valuation relative to wireless carrier peers
Pactiv Corp. 2.8 Improving packaging product demand
Park Place Entertainment 2.4 See improved gaming industry conditions, rising free cash flow
Peregrine Systems 3 See growing demand for co.'s infrastructure resource management
Quest Diagnostics 6.3 Favorable demographic trends for diagnostic testing
Sears, Roebuck 14.7 Streamlining product mix, low valuation
Siebel Systems 11.5 New Siebel 7 product release seen spurring growth
Steel Dynamics 0.5 Low cost minimill seen benefiting from reduced steel industry capacity
TXU Corp. 11.9 Regulated electic utility generating good, steady EPS growth, 5% yield
Tyco International 108.5 Focus on recurring and service revenues generating steady EPS gains
UTStarcom 3 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 equity research director for Standard & Poor's

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