On Dec. 11, Standard & Poor's equity research group made changes to the S&P Top 10 portfolio -- those issues it considers to be the best candidates for capital gains over the next 6 to 12 months. S&P replaced generic drugmaker Barr Laboratories (BRL ; recent price, $76) with brewing giant Anheuser-Busch (BUD ; $52).
Like all the stocks in the portfolio, Anheuser-Busch carries S&P's highest investment ranking, 5 STARS (buy). Barr was removed from the portfolio after it was downgraded to 3 STARS (hold) from 5 STARS on Dec. 10.
Anheuser-Busch is the name behind well known beer brands Budweiser, Michelob, and Busch, and has other operations in entertainment, glass manufacturing, theme parks, and real estate. S&P is encouraged by favorable beer pricing trends which, along with anticipated market share gains in U.S. and abroad, are expected to drive a gain in estimated 2004 earnings per share of around 13%, to $2.79. Additionally, we feel that likely investor rotation into higher quality names in 2004 will allow for some expansion of Anheuser's p-e multiple. Our 12-month target price for the stock is $63.
Year-to-date through Nov. 30, the S&P Top Ten portfolio climbed 39.4%, vs. a gain of 22.3% for its benchmark, the S&P 500-stock index (both of these performances include dividends).
Here's the latest list:
S&P Top 10 Portfolio
For more information about the Top 10 portfolio, please visit http://www.businessweek.com/investor/content/jun2002/pi20020617_8998.htm
By Ken Shea and Robert Gold