Stocks to Defy the January Barometer

Signs indicate the S&P 500 may have a down year, but this screen finds 21 companies that started 2003 strong -- and should stay that way

By Michael Kaye

By now, most investors have probably heard of the January Barometer. That market predictor says if the S&P 500-stock index rises in January, the index usually goes on to post a full-year gain. Our colleague Sam Stovall has written about this effect as it applies to S&P sectors (see BW Online, 02/03/03, "January's Glum Precedent for the Year"). We thought we'd take it one step deeper, to zero in on individual stocks.

So we set out to look for quality issues that posted a strong performance in January. We screened our database for stocks that had double-digit returns in January despite the S&P 500's decline of 2.75%. Then we added one more criterion. From that list, we looked for those issues ranked 4 STARS (accumulate) or 5 STARS (buy) by Standard & Poor's analysts, meaning they're expected to outperform the overall market over the next 6 to 12 months.

These 21 names emerged:

Company Name/ Ticker STARS Ranking
AirTran (AAI ) 4
Amsurg (AMSG ) 4
Applebee's (APPB ) 5
Barr Labs (BRL ) 5
Biovail (BVF ) 4
Career Education (CECO ) 4
Check Point Software (CHKP ) 4
Cytyc (CYTC ) 4
El Paso Energy Partners (EPN ) 4
Estee Lauder (EL ) 4
Fair, Isaac (FIC ) 5
Lear (LEA ) 5
Liberty Media (L ) 4
Mentor Graphics (MENT ) 4
Mylan Labs (MYL ) 4
Oracle (ORCL ) 4
Rockwell International (ROK ) 4
Steel Dynamics (STLD ) 4
Symantec (SYMC ) 5
U.S. Physical Therapy (USPH ) 4
Western Digital (WDC ) 4

Kaye is a portfolio services analyst for Standard & Poor's

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