A Focus Stock Report Card
By Ken Shea
How time flies. It is hard to believe, but the S&P Focus Stock of The Week feature is nearly two years old! Since July 23, 1999, the Standard & Poor's U.S. equity research department has highlighted one of the many stocks ranked 5 STARS within its universe at the time as the one stock that is best poised for near-term capital appreciation. Since the selection is always a 5-STAR ranked stock when featured, S&P analysts believe that the stock is also poised for above-average capital gains relative to the S&P 500 index over the subsequent six to 12 months as well.
Since the launch of the S&P Focus Stock of The Week feature in July 1999, more than 80 stocks have been featured. Recently, many inquiries have been made as to the performance record. For those that asked, thank you!
To track the performance of the feature, S&P Portfolio Analyst Michael Kaye assumed the following: An investor purchased the S&P Focus Stock of The Week at the closing price on the Friday before the Monday that the stock was initially featured, held it for six months, then sold. This hypothetical investor repeated this action from the first feature on July 23, 1999 through April 27, 2001.
I am proud to report that the performance results are remarkable. During this time, the S&P Focus Stock of The Week "portfolio" appreciated by 38.8%, versus a decline in the S&P 500 index of 15.5% during this same period. Of course, these hypothetical returns exclude the effects of dividends, transaction costs and taxes. Also, past results are not necessarily indicative of future performance. Nevertheless, the track record is an impressive one, and one we will work hard to replicate in the future.
Since the feature's inception, the three best performers over the subsequent six months from being featured were: Cor Therapeutics (COR ), up 221%, originally featured Jan. 7, 2000; Concentric Networks, up 158%, originally featured Sept. 17, 1999 and acquired by Nextlink Communications June 16, 2000; and Immunex (IMNX ), up 130%, Aug. 13, 1999. The three worst performers were: JDS Uniphase (JDSU ), down 77.3%, Sept. 8, 2000; Macromedia (MACR), down 60%, Aug. 11, 2000; and Vishay Intertechnology (VSH), down 56%, June 16, 2000.
Shea is Managing Director of U.S. equity research for Standard & Poor's