62 Mid-Cap Resolutions for the New Year

What resolutions do you have planned for 2014? I’ll tell you what mine is: To make 2014 an even better year for my investments than 2013 was. Now, that seems like a tall order, given that the Dow and the S&P 500 are both up over 25% year-to-date. But I think we can do it, and here’s why.

I expect to see many of the same forces at work in 2014 as in 2013. We’re seeing year-end pension funding kick up in time for the New Year. And I think that the market is pretty much going to meander higher through the end of April—we’ll probably have somewhat of a correction in mid-February at the end of earnings season. But the fact is that there’s nowhere to go. The market still yields more than the bank and the Fed still maintains its 0% interest rate policy, which allows corporations to borrow very cheaply on the bond market. And we’re starting to see good earnings, which was the missing ingredient in the stock market.

Now after April 15, I expect the market to get a little bumpier, simply because that’s when pension funding winds down. But this should be somewhat offset by good earnings. As a sidenote, at the end of nearly every quarterly earnings season there’s usually profit taking. There’s usually profit taking in mid-February for a few weeks, in mid-May for another few weeks, in August for several weeks and in November for maybe a week or so. But these pullbacks are usually short-lived and the excitement on Wall Street builds back up with the arrival of the next earnings anouncement season.

Combined with the latest update from the Fed, 2014 looks like it’s going to be another strong year. Of course, that doesn’t mean that we can just sit on our laurels. To make the most of the current market strength we’re seeing right now, I’ve drawn up a list of the latest upgrades and downgrades in Portfolio Grader. This week, I’m focusing on mid-cap stocks because this asset class tends to do very well this time of year. Let’s start with 18 stocks that have been upgraded to buys this week:

Upgrades

Last Week’s Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
BAH Booz Allen Hamilton Holding Corporation  C B
BKW Burger King Worldwide, Inc. B B
BRS Bristow Group Inc. C B
CZR Caesars Entertainment Corporation B D
DNB The Dun & Bradstreet Corporation B C
FNF Fidelity National Financial, Inc.  B C
LAMR Lamar Advertising Company  B B
MRVL Marvell Technology Group Ltd. B B
NS NuStar Energy L.P. B C
RES RPC, Inc. B C
ROL Rollins, Inc. B B
SHOO Steven Madden, Ltd. B B

Last Week’s Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
ASNA Ascena Retail Group, Inc. D C
BIP Brookfield Infrastructure Partners L.P. D C
CMC Commercial Metals Company C C
CNW Con-way Inc. C C
DLB Dolby Laboratories, Inc.  C C
DPM DCP Midstream Partners, LP C C
GRMN Garmin Ltd. D B
HFC Hollyfrontier Corporation C D
MRC MRC Global Inc. C C
PANW Palo Alto Networks, Inc. D C
PETM PetSmart, Inc. D B
PSEC Prospect Capital Corporation C C
SCI Service Corporation International C C
SLGN Silgan Holdings Inc. D B
TGH Textainer Group Holdings Limited C D
TWTC tw telecom inc.  C D

Downgrades

Last Week’s Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
ATR Aptargroup, Inc. C C
CFX Colfax Corporation C C
COO The Cooper Companies, Inc. B C
CSC Computer Sciences Corporation C C
FRC First Republic Bank C C
LFUS Littelfuse, Inc. C B
NTL Nortel Inversora SA    C B
OI Owens-Illinois, Inc. C C
RKT Rock-Tenn Company  C B
SMI Semiconductor Manufacturing International Corp.  C B
SON Sonoco Products Company C C
SPWR SunPower Corporation C B
TEN Tenneco Inc. C C
TEO Telecom Argentina SA  C B
VR Validus Holdings, Ltd. B C
WGP Western Gas Equity Partners LP C B
WOOF VCA Antech, Inc. C B
WOR Worthington Industries, Inc. C B

Last Week’s Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
AN AutoNation, Inc. D C
ANSS ANSYS, Inc. D B
ARG Airgas, Inc. D C
BRP Brookfield Residential Properties Inc. D C
DCI Donaldson Company, Inc. D B
DYN Dynegy Inc. D C
ESGR Enstar Group Limited D B
GZT Gazit-Globe Ltd. D B
LANC Lancaster Colony Corporation D C
MTZ MasTec, Inc. D B
NAV Navistar International Corporation D C
RLJ RLJ Lodging Trust D B
SRC Spirit Realty Capital, Inc. F C
SUSQ Susquehanna Bancshares, Inc. D C
WTR Aqua America, Inc. D C
XL XL Group Plc D C

Sincerely,

Louis Navellier

Louis Navellier

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