When the STARS Are in Alignment

This week's screen looks for companies with buy ratings from S&P -- and a number of other research outfits

By Michael Kaye, CFA

While we typically feature stocks with Standard & Poor's highest investment ranking, 5 STARS (buy), thought we would try something a little different this week: find issues which get top marks not only from from our analysts, but from other investment research outfits as well.

Of course, our starting point was the list of S&P 5-STAR stocks. We then looked for companies which, on average, would have a ranking equivalent to 5 STARS from outside analysts. To make sure that the stocks in our search received a fair degree of research coverage, we sifted for names also followed by at least five non-S&P analysts.

Finally, we also wanted to identify issues that would be considered attractive by another measure: relative strength. To uncover the stocks on the list with the strongest positive momentum, we looked for those with a 13-week S&P relative strength score of greater than 75, placing them in the top quartile of S&P's universe of ranked companies.

These five names made the cut:

High scores from S&P and other research outfits
Company/ticker S&P STARS Rank
D.R. Horton (DHI ) 5
Lennar (LEN ) 5
Martek Biosciences (MATK ) 5
Nextel Partners (NXTP ) 5
Regis (RGS ) 5

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

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