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 | C | B |
BKW | Burger King Worldwide | B | B |
BRS | Bristow Group | C | B |
CZR | Caesars Entertainment | B | D |
DNB | Dun & Bradstreet | B | C |
FNF | Fidelity National Financial | B | C |
LAMR | Lamar Advertising | B | B |
MRVL | Marvell Technology | B | B |
NS | NuStar Energy | B | C |
RES | RPC | B | C |
ROL | Rollins | B | B |
SHOO | Steven Madden | B | B |
Last Week’s Sells, Now Holds
Symbol | Company Name | Quantitative Grade | Fundamental Grade |
ASNA | Ascena Retail Group | D | C |
BIP | Brookfield Infrastructure Partners | D | C |
CMC | Commercial Metals | C | C |
CNW | Con-way | C | C |
DLB | Dolby Laboratories | C | C |
DPM | DCP Midstream Partners | C | C |
GRMN | Garmin | D | B |
HFC | Hollyfrontier | C | D |
MRC | MRC Global | C | C |
PANW | Palo Alto Networks | D | C |
PETM | PetSmart | D | B |
PSEC | Prospect Capital | C | C |
SCI | Service Corporation International | C | C |
SLGN | Silgan Holdings | D | B |
TGH | Textainer Group Holdings | C | D |
TWTC | tw telecom | C | D |
Downgrades
Last Week’s Buys, Now Holds
Symbol | Company Name | Quantitative Grade | Fundamental Grade |
ATR | Aptargroup | C | C |
CFX | Colfax | C | C |
COO | Cooper Companies | B | C |
CSC | Computer Sciences Corporation | C | C |
FRC | First Republic Bank | C | C |
LFUS | Littelfuse | C | B |
NTL | Nortel Inversora SA | C | B |
OI | Owens-Illinois | C | C |
RKT | Rock-Tenn Company | C | B |
SMI | Semiconductor Manufacturing International | C | B |
SON | Sonoco Products | C | C |
SPWR | SunPower | C | B |
TEN | Tenneco | C | C |
TEO | Telecom Argentina SA | C | B |
VR | Validus Holdings | B | C |
WGP | Western Gas Equity Partners | C | B |
WOOF | VCA Antech | C | B |
WOR | Worthington Industries | C | B |
Last Week’s Holds, Now Sells
Symbol | Company Name | Quantitative Grade | Fundamental Grade |
AN | AutoNation, | D | C |
ANSS | ANSYS | D | B |
ARG | Airgas | D | C |
BRP | Brookfield Residential Properties | D | C |
DCI | Donaldson Company | D | B |
DYN | Dynegy | D | C |
ESGR | Enstar Group Limited | D | B |
GZT | Gazit-Globe | D | B |
LANC | Lancaster Colony | D | C |
MTZ | MasTec | D | B |
NAV | Navistar International | D | C |
RLJ | RLJ Lodging Trust | D | B |
SRC | Spirit Realty Capital, | F | C |
SUSQ | Susquehanna Bancshares | D | C |
WTR | Aqua America | D | C |
XL | XL Group | D | C |