A September Surge for PowerPicks

A rebound in Corinthian Colleges helped the portfolio of S&P analysts' top selections beat the S&P 500 for the month

By Ken Shea and Robert Gold

The -- representing S&P analysts' top picks for the year -- outperformed its benchmark, the S&P 500 index, in September. For the month, the portfolio generated a total return of 3.8%, vs. a gain of 1.1% for the "500", both including dividends.

Top performers on the month included Corinthian Colleges (COCO ), up 18.6%, Quiksilver (ZQK ), up 16.9%, Nextel Partners (NXTP ), up 15%, Millennium Pharmaceutical (MLNM ), also up 15%, and ENSCO International (ESV ), up 12.0%. Corinthian and Nextel Partners rebounded from significant losses in the prior month.

Brining up the rear in September were Open Text (OTEX ), down 20%, America West Holdings (AWA ), down 18.2%, Sysco (SYY ), down 6.5%, Reliant Energy (RRI ), down 6.3%, and Sealed Air (SEE ), down 5.6%. Open Text suffered its second straight month of double-digit declines.

Year to date through Sept. 30, the portfolio has beaten the "500" in 5 of 9 months, but has lagged its benchmark with a total return of 0.5%, while the "500" gained 1.5%. Of the 40 portfolio stocks, 23 had beaten the "500" while 17 had underperformed the index.

Note: PowerPicks member Evergreen Resources was acquired by Pioneer Natural Resources (PXD ) on Sept. 28. Evergreen was removed from the portfolio following the deal's closing. As a result, there will be only 39 stocks in the Portfolio through the end of the year.

About the S&P PowerPicks 2004 Portfolio

The portfolio represents the collective "best ideas" of the Standard & Poor's equity research staff.

Each of the most senior 40 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 2004 Portfolio is diversified across all the 10 S&P economic sectors comprising the S&P 500 index.

The portfolio is a "frozen" one, meaning 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 index during the next 12 months.

Sector/Company Ticker Market Cap $bil. S&P Earns. & Div. Rank S&P Index
CONSUMER DISCRETIONARY
Comcast Class A CMCSA 71,052 C 500
Fortune Brands FO 10,091 B- 500
Gannett GCI 23,755 A 500
La Quinta LQI 901 C None
Omnicom OMC 15,857 A+ 500
Quicksilver ZQK 944 B+ 600
Viacom Class B VIA.B 67,380 B- 500
CONSUMER STAPLES
Constellation Brands STZ 3,471 B+ 400
PepsiCo PEP 83,262 A 500
Sysco SYY 23,284 A+ 500
ENERGY
ENSCO Intl. ESV 3,957 B 400
*Evergreen Resources EVG 1,316 B- 600
Exxon Mobil XOM 243,108 A- 500
FINANCIALS
Bear Stearns BSC 7,142 A 500
Citigroup C 240,291 A+ 500
Commerce Bancorp CBH 3,915 A 400
Hartford Financial Services HIG 16,139 B 500
IndyMac Bancorp NDE 1,666 B+ 400
MBNA KRB 31,980 A+ 500
HEALTH CARE
Caremark Rx CMX 7,183 B- None
Hologic HOLX 317 B- 600
Millennium Pharmaceuticals MLNM 4,727 NR 400
Mylan Labs MYL 6,648 A- 400
Triad Hospitals TRI 2,532 NR 400
INDUSTRIALS
America West Holdings AWA 424 NR None
Corinthian Colleges COCO 2,517 NR 400
Kaydon KDN 730 A- 600
Landstar LSTR 1,083 B 600
Manitowoc MTW 741 B 600
INFORMATION TECHNOLOGY
Analog Devices ADI 17,322 B 500
Automatic Data Processing ADP 23,099 A+ 500
Cadence Design Systems CDN 4,600 B- 400
Flextronics FLEX 7,715 NR None
IBM Corp. IBM 155,900 B 500
Intrado TRDO 1,083 NR None
Open Text OTEX 788 NR None
MATERIALS
Smurfit-Stone Container SSCC 4,486 B- None
Sealed Air SEE 4,517 NR 500
TELECOM SERVICES
Nextel Partners NXTP 2,951 NR None
UTILITIES
Reliant Energy RRI 1,815 NR None

*Removed from the portfolio following its acquisition by Pioneer Natural Resources on September 28.

For more on the S&P PowerPicks 2004 portfolio, please visit http://www.businessweek.com/investor/content/dec2003/pi20031226_5517_pi071.htm

Shea is director of global equity research, and Gold a senior portfolio group analyst, for Standard & Poor's Equity Research Services

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