By Ken Shea and Robert Gold
On Feb. 25, 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 America West Holdings (AWA ; recent price, $10) and Lennar (LEN ; $46) with Caremark Rx (CMX ; $32) and Qualcomm (QCOM ; $62).
Like all the stocks in the portfolio, Caremark and Qualcomm carry S&P's highest investment ranking, 5 STARS (buy). America West and Lennar maintain their 5-STARS rankings.
Qualcomm provides digital wireless telecommunications products and services based on its Code Division Multiple Access (CDMA) and other technologies. We believe it is a compelling investment amid the group of communications equipment companies we cover and think that it will benefit from rising demand for its CDMA integrated chipsets. Our 12-month target price for the stock is $80.
Caremark provides prescription services to over 1,200 health plan sponsors. Our enthusiasm toward the stock is fueled by the planned acquisition of AdvancePCS (ADVP ; $69), pending necessary approvals, and our bullishness on the pharmacy benefits management sector. Our 12-month target price for the stock is $38.
Year-to-date through January 30, 2004, the S&P Top Ten portfolio rose 0.18%, vs. a gain of 1.84% 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
Shea is director of global equity research, and Gold a senior portfolio group analyst, for Standard & Poor's Equity Research