Whirlpool Washes Out of S&P Top 10

The appliance maker was replaced in the portfolio of S&P's best investment ideas by consumer-products giant Procter & Gamble

On July 17, 2002, Standard & Poor's equity research group made a change to the S&P Top 10 portfolio -- those stocks that we believe to be best-positioned for capital gains over the coming 6 to 12 months. Appliance-maker Whirlpool (WHR ), which had been downgraded on July 16 from 5 STARS (buy) to 3 STARS (hold), was replaced with Procter & Gamble (PG ).

S&P analyst Efraim Levy had lowered his ranking on Whirlpool on July 16, noting that his more conservative approach to the stock stemmed from reduced consumer confidence and the risk of a slowdown in the housing sector.

On the other hand, P&G, covered by S&P's Howard Choe, stands to benefit from the weaker U.S. dollar and improved volume and margin trends.

Here's the current list:

S&P Top 10 Portfolio

Company Current Price (7/17/02) 12-Month Target Investment Rationale
Dean Foods 32.04 45 New products, improved distribution
Procter & Gamble 80.07 100 Foreign exchange trends, recent share-price drop
Quest Diagnostics 70.23 115 Strong fundamentals, attractive valuation
Microchip Technologies 26.52 40 Pure play in microcontroller chips
Nabors Industries 31.97 56 Natural-gas activity expected to rise
Citigroup 36.93 55 Trading at a big discount to historical valuation
Mohawk Industries 47.77 77 Strong demand, favorable costs
Constellation Brands 27.85 34 New products, lower costs, stock buybacks
Ambac Financial 56.96 78 Solid business model, franchise
Tenet Healthcare *47.50 *61 Improving operations, low valuation

*Reflects 3-for-2 split.

For more information about the Top 10 portfolio, please visit http://www.businessweek.com/investor/content/jun2002/pi20020617_8998.htm

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