A Solid October for PowerPicks
By Ken Shea and Robert Gold
The -- representing S&P analysts' top picks for the year -- ended October in a dead heat with its benchmark, the S&P 500-stock index. For the month, both the portfolio and the S&P 500 generated a total return of 1.5%, both including dividends.
The portfolio's top performers on the month were led by Intrado (TRDO ), up 33.9%; Landstar Systems (LSTR ), up 15.8%; and Reliant Energy (RRI ), up 10.2%, bounding back smartly from a 6.3% drop in the previous month. Also posting strong performances: Viacom (VIA.B ), up 8.7%, and Omnicom (OMC ), up 8%.
October's PowerPicks laggards included included America West (AWA ), down 15.2% (its second straight month of double-digit declines); Indymac Bancorp (NDE ); down 10.9%, Smurfit-Stone Container (SSCC ), down 10.4%; Flextronics (FLEX ), down 9.1%; and Caremark Rx (CMX ), down 6.6%.
Year-to-date through Oct. 29, the portfolio has beaten the S&P 500 in 5 out of 10 months but has lagged behind its benchmark with a total return of 2%, while the 500 gained 3.1%. Of the 40 portfolio stocks, 20 had beaten the index, while 20 had underperformed it.
Note: PowerPicks member Evergreen Resources was acquired by Pioneer Natural Resources (PXD ) on Sept. 28. Evergreen was removed from the portfolio following the deal's closing. As a result, the Portfolio will hold only 39 stocks through yearend.
About the S&P PowerPicks 2004 Portfolio
The portfolio represents the collective "best ideas" of the Standard & Poor's equity research staff.
Each of the most senior 40 industry analysts on S&P's equity research staff has chosen one of the stocks they follow as the best-positioned for superior growth. The S&P PowerPicks 2004 Portfolio is diversified across all the 10 S&P economic sectors that make up the S&P 500 index.
The portfolio is a "frozen" one, meaning it will undergo no changes throughout the entire year. Its objective is to exceed the total return (capital appreciation plus dividends paid) generated by the S&P 500 index during the next 12 months.
*Removed from the portfolio following its acquisition by Pioneer Natural Resources on Sept. 28.
For more on the S&P PowerPicks 2004 portfolio, see "S&P Selects the Best of the Best".
Shea is director of global equity research, and Gold a senior portfolio group analyst, for Standard & Poor's Equity Research Services