By Ken Shea
The -- representing S&P analysts' top picks for the year -- lagged its benchmark, the S&P 500 index, by a modest amount in May, declining 1.5% vs. the index's drop of 0.9%. Year to date through May 31, the portfolio remains ahead of the "500," -3.1% vs. -7.1%.
The portfolio's best performers in May were Tyco (+19%), Pactiv (+12%), and Sears (+12%). Strength in these issues helped offset hefty losses in tech names Peregrine Systems (-80%), Siebel Systems (-25%), and NEXTEL (-12%).
Year to date through May 31, 19 of the Portfolio stocks beat the "500", while 16 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
Shea is U.S. equity research director for Standard & Poor's
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