Shooting STARS

Here are 21 stocks that have recently been upgraded to S&P's highest investment ranking

By Numer de Guia

Stocks with Standard & Poor's highest investment ranking, 5 STARS, are expected by S&P equity analysts to outperform the overall market over the next 6 to 12 months. As of May 16, 2002, 103 stocks carried that designation, out of a total of 1,157 issues covered by S&P analysts.

While it's a select group, it's not static. S&P analysts may give the 5-STAR ranking to a company not previously covered by S&P. Or a company with a lower STARS ranking may see a positive change in its business fundamentals -- or present a very attractive valuation -- that prompts an analyst to upgrade it to the top STARS category. On the flip side, companies may be downgraded from their 5-STARS standing if their fundamentals worsen -- or their stock price gets ahead of what S&P analysts would consider a reasonable valuation.

We thought it would be worthwhile to take a look at companies that have recently moved up the STARS ladder to reach its highest rung. So in our latest screen, we searched for stocks with S&P rankings that have been upgraded to 5 STARS (strong buy) since the end of March, 2002, and that have maintained that rating as of May 16, 2002.

These 21 stocks emerged:

• Ambac Financial (ABK )

• American Standard (ASD )

• Amsouth Bancorporation (ASO )

• Banknorth Group (BKNG )

• Barra (BARZ )

• Cendant (CD )

• Clear Channel (CCU )

• Comcast (CMCSK )

• Dreyer's Grand (DRYR )

• GTech (GTK )

• Helix Technology (HELX )

• Hospitality Properties (HPT )

• International Rectifier (IRF )

• Laboratory Corp. of America (LH )

• Lifepoint Hospitals (LPNT )

• Longs Drug Stores (LDG )

• Moore (MCL )

• Ocean Energy (OEI )

• Omnicom Group (OMC )

• Sysco (SYY )

• Triad Hospitals (TRI )

De Guia is a portfolio services analyst for Standard & Poor's

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