38 Ways to Prepare For Market Choppiness

Even though the closing bell hasn’t rung yet, this is shaping up to be a bumpy trading week. With all eyes on Cyprus and its crumbling banking system, financial stocks opened sharply lower this morning. Cyprus caused a stir after its parliament delayed its vote on a bailout package, a deal that would include a minimum 6.75% levy on all bank accounts. Cypriot banks will remain closed until Thursday, but already plenty of account holders are threatening to cash out.

As dramatic as all of this was, it didn’t long for the equities market to recover its footing. By mid-afternoon, Wall Street rebounded thanks to renewed strength in consumer staples, healthcare and tech stocks. It appears that Cyprus’ worries failed to discourage yield-hungry investors from bidding up high-dividend stocks. In the past week, S&P stocks that pay no dividend have edged up just 0.26%, those that pay some kind of dividend have climbed 1.68% while those with generous yields (5% or higher) have advanced 1.96%. As I’ll discuss in greater detail tomorrow, the Federal Reserve’s policies are setting the stage for the end of the bond bubble, so high-yield stocks remain as attractive as ever.

But above all else, you would do well to stick to highly-rated stocks in the coming weeks, because things should only get choppier from here.. So let’s look at the 38 big blue chips that have been upgraded and downgraded this weekend. After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, I decided to revise my Portfolio Grader recommendations for each of the stocks listed below.

Upgrades

Last Week’s Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
ADP Automatic Data Processing Inc. B C
BMY Bristol-Myers Squibb Co. B C
CHT Chunghwa Telecom Co. Ltd. ADS B C
EQT EQT Corp. B D
KORS Michael Kors Holdings Ltd. C A
MGA Magna International Inc. C B
NMR Nomura Holdings Inc. ADS B C
ORCL Oracle Corp. B B
RTN Raytheon Co. B C
STX Seagate Technology Inc. B B
TWC Time Warner Cable Inc. B B
WAG Walgreen Co. B D

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
COP ConocoPhillips D C
ETR Entergy Corp. D C
F Ford Motor Co. C C
GM General Motors Co. C D
HES Hess Corp. C C
KYO Kyocera Corp. ADS C D
PCG PG&E Corp. C D
UNH UnitedHealth Group Inc. D B

Downgrades

Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
ABV Companhia de Bebidas das Americas ADS C B
ATVI Activision Blizzard Inc. C B
BAC Bank of America Corp. C C
CRM salesforce.com inc. C C
GE General Electric Co. C C
JPM JPMorgan Chase & Co. C B
NLSN Nielsen Holdings N.V. C C
NTRS Northern Trust Corp. C C
PSA Public Storage C B
SLF Sun Life Financial Inc C C

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
BBT BB&T Corp. D C
CSX CSX Corp. D C
CTSH Cognizant Technology Solutions Corp. D B
EL Estee Lauder Cos. Cl A D B
NUE Nucor Corp. D C
QCOM QUALCOMM Inc. D B
TXN Texas Instruments Incorporated D C
XOM Exxon Mobil Corp. D B

Sincerely,

Louis Navellier

Louis Navellier

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