Sticking with the Winners

S&P's newest screen turned up 10 stocks to warm a momentum investor's heart

By David Braverman

Momentum investing, a strategy favored by many professionals, involves buying stocks that have been strong recently. The rationale: The factors that have pushed a stock upward in a generally sloppy market will propel it forward once the overall investment climate improves.

In other words, if these stocks can consistently outperform in a terrible market, imagine what they might be able to do when the wind is finally at Wall Street's back.

With this approach in mind, we built the following screen. First, we identified the 50 stocks in the S&P 500 with the best total returns for the three months ended January 31, 2002. From that group of 50, we then selected those 10 stocks with the greatest improvement in returns for the 12 months ended January 31, 2002, when compared to the 12 months ended January 31, 2001.

These 10 stocks emerged:

Apple Computer (AAPL )

Circuit City (CC )

Freeport McMoran Copper & Gold (FCX )

H&R Block (HRB )

KLA Tencor (KLAC )

Nordstrom (JWN )

Novell (NOVL )

Nucor (NUE )

U.S. Steel (X )

Xerox (XRX )

Braverman is senior investment officer for Standard & Poor's

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