50 Ways to Make Market Swings Work For You

We’re only a few weeks into first-quarter earnings season and already the analyst community has slashed their overall earnings estimates: The average S&P 500 company is now expected to post a slight dip in earnings. This, and the fact that the seasonal pension funding season is over, has given some in the “sell in May and go away” crowd an excuse to flee the market. So the “bad news” is that the market is now officially oversold.

We knew this was coming, but if the recent bumpiness has you nervous, you can keep this in mind. First, as I mentioned earlier, if history repeats itself, Wall Street will likely bounce around over the next few weeks before firming up sometime next month. So this near-term bumpiness presents some tantalizing buying opportunities.

First, high-yield stocks are looking more attractive by the hour. With the average S&P 500 stock yielding nearly 2.1%, the stock market is much better than you can get through most savings accounts. When chasing yields, just be sure to do your homework and screen dividend stocks for fundamental health.

The other opportunity is in companies that are surprising Wall Street with their first quarter sales and earnings results. You can use Portfolio Grader to get a sense of which companies are likely to beat estimates; take note of how a company scores in terms of “Analyst Earnings Revisions” and “Earnings Surprises.”

Even though the stock market might be oscillating day to day, volatility is now moderating and I suspect that we can use these daily oscillations to step up and buy these premium stocks. But before you buy, let’s look at the 50 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
AFL AFLAC Inc. B B
APH Amphenol Corp. Cl A B B
BBVA Banco Bilbao Vizcaya Argentaria S.A. ADS B B
BEAM Beam Inc B B
BRFS BRF SA ADR B B
DISH DISH Network Corp. Cl A B D
ETR Entergy Corp. B C
IBN ICICI Bank Ltd. ADS B B
KO Coca-Cola Co. B C
MA MasterCard Inc. Cl A C B
SNDK SanDisk Corp. B C
TSM Taiwan Semiconductor Manufacturing Co.  B B
VIP VimpelCom Ltd. ADS B B
VRTX Vertex Pharmaceuticals Inc. A F
VRX Valeant Pharmaceuticals International Inc. B C

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
BBBY Bed Bath & Beyond Inc. D B
CMG Chipotle Mexican Grill Inc. D B
CRM salesforce.com inc. D C
EL Estee Lauder Cos. Cl A D B
EXC Exelon Corp. C D
INFY Infosys Ltd. ADR D C
MJN Mead Johnson Nutrition Co. D B
RBS Royal Bank of Scotland Group PLC ADS C D
SAN Banco Santander S.A. ADS C D
SBUX Starbucks Corp. D B
VIV Telefonica Brasil SA ADR D C

Downgrades

Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
BAP Credicorp Ltd. C B
BTI British American Tobacco PLC ADR C B
CTRX Catamaran Corp C C
CX Cemex SAB de CV ADR B C
GE General Electric Co. C C
GPC Genuine Parts Co. C C
MTB M&T Bank Corp. C B
STX Seagate Technology Inc. C B
TWC Time Warner Cable Inc. C B

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
ABB ABB Ltd. ADS D C
BXP Boston Properties Inc. D D
EOG EOG Resources Inc. D D
EQR Equity Residential D C
ESV Ensco PLC Cl A D C
FDX FedEx Corp. D C
FTI FMC Technologies Inc. D C
HAL Halliburton Co. D C
HOG Harley-Davidson Inc. D C
IBM International Business Machines Corp. F B
L Loews Corp. D D
NSC Norfolk Southern Corp. D C
ROK Rockwell Automation Inc. D C
USB U.S. Bancorp D C
XOM Exxon Mobil Corp. D B

Sincerely,

Louis Navellier

Louis Navellier

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