75 Ways to Stay Ahead of the Eight Ball

A lot of investors like to take a break from the market during the summer season. By doing so, they miss out on some important trends. I don’t want you to succumb to their fate—being behind the eight ball when volume returns to the market and stocks start their inevitable rise. So let’s look at what this month has in store in the way of profit opportunities.

June is known as an earnings pre-announcement month. Now that first-quarter earnings season has come and gone, institutional investors have their eye on what analysts are predicting for second-quarter corporate profits.

Analyst Earnings Revisions: A Powerful Profit Predictor

Analysts publish their best estimates for earnings at the beginning of each quarter. As the earnings date nears, however, and the picture of a company’s performance becomes clearer, analysts frequently have to revise their estimates to make them more accurate. This too can draw buying interest, if the estimates are increasing. Given that analysts are often too conservative when it comes to fundamentally sound companies, positive revisions can lead to earnings surprises.

Your Own Personal Guide

So what I look for every earnings season is stocks with not only the highest year-over-year earnings and sales growth, but also the ones with the most aggressive upward earnings revisions. And you can do the same by running your positions through Portfolio Grader. One metric that my stock screening tool covers is analyst earnings revisions.

For example, if you were to run Apple Inc. (AAPL) through Portfolio Grader, you’d immediately see that the analyst community isn’t very bullish about this gadget giant—AAPL currently receives a D for Analyst Earnings Revisions. In fact, over the past ninety days, the average earnings estimate for this quarter has been slashed nearly 25%. Ouch!

It just goes to show that a lot can happen in a matter of weeks, or even days. Last week’s buys could become today’s holds, or even sells. So I can’t stress enough how important it is to continuously check up on your stocks, including by running them through Portfolio Grader. Now that analyst activity has picked up, let’s take a moment to review the 75 big name blue chips that have been upgraded or downgraded in Portfolio Grader over the weekend.

Upgrades

Last Week’s Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
ACE ACE Ltd. B B
ADBE Adobe Systems Inc. B C
AIG American International Group Inc. B C
BSX Boston Scientific Corp. B D
EMN Eastman Chemical Co. B B
F Ford Motor Co. B C
FITB Fifth Third Bancorp B B
HES Hess Corp. C B
HIG Hartford Financial Services Group Inc. B C
IR Ingersoll-Rand Plc B C
KYO Kyocera Corp. ADS B C
LINTA Liberty Interactive Corp. Interactive Series A B C
MA MasterCard Inc. Cl A B B
MFC Manulife Financial Corp. B C
MSI Motorola Solutions Inc. B B
MUR Murphy Oil Corp. B C
ORLY O’Reilly Automotive Inc. B B
ROP Roper Industries Inc. B B
RRC Range Resources Corp. B C
SNDK SanDisk Corp. B B
TV Grupo Televisa S.A.B. ADS B C
WFC Wells Fargo & Co. B B

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
AGU Agrium Inc. C C
AMTD TD Ameritrade Holding Corp. C C
APC Anadarko Petroleum Corp. C C
AV Aviva PLC ADS C C
DHR Danaher Corp. D C
ERIC Ericsson ADR C D
HPQ Hewlett-Packard Co. C C
KSS Kohl’s Corp. C B
LVS Las Vegas Sands Corp. C B
PRU Prudential Financial Inc. C C
SDRL Seadrill Ltd. C B
TS Tenaris S.A. ADS C C

Downgrades

Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
ABT Abbott Laboratories C B
ADP Automatic Data Processing Inc. C C
BAP Credicorp Ltd. C B
BCE BCE Inc. C B
BEN Franklin Resources Inc. C B
DAL Delta Air Lines Inc. B C
DG Dollar General Corp. D B
DIS Walt Disney Co. C B
ENB Enbridge Inc. C C
EPD Enterprise Products Partners L.P. C B
GPC Genuine Parts Co. C C
HCP HCP Inc. C B
KMI Kinder Morgan Inc. C C
NEE NextEra Energy Inc C D
NGG National Grid PLC ADS C C
NLSN Nielsen Holdings N.V. C C
NU Northeast Utilities C B
PAYX Paychex Inc. C C
PSA Public Storage C C
SYY Sysco Corp. B C
TRP TransCanada Corp. C C
UAL United Continental Holdings Inc. C C
VIA Viacom Inc. Cl A C C
WMT Wal-Mart Stores Inc. C C

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
ABV Companhia de Bebidas das Americas ADS D C
BEAM Beam Inc D B
COP ConocoPhillips D C
CTL CenturyLink Inc. D B
D Dominion Resources Inc. (Virginia) D D
DUK Duke Energy Corp. D C
EIX Edison International D B
FRX Forest Laboratories Inc. D D
HMC Honda Motor Co. Ltd. ADS D D
HOG Harley-Davidson Inc. D B
KO Coca-Cola Co. D C
PCG PG&E Corp. D C
RDS.B Royal Dutch Shell PLC ADS D C
T AT&T Inc. F C
WFM Whole Foods Market Inc. D B
XEL Xcel Energy Inc. D C
XRX Xerox Corp. F B

Sincerely,

Louis Navellier

Louis Navellier

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