Five Winning Stocks

I am frequently asked what is different about our approach to rating stocks and how have we have fared on stock picks.

The easiest way to answer this is to talk about the benefits of quantitative modeling and to give a few examples of how our long-term approach works.

TheStreet.com Ratings approach utilizes a quantitative computerized model. Every night we load information on thousands of stocks into our computers and generate views of the whole market, not just a sector. These are consistent views that utilize a series of proprietary algorithms we have developed and fine-tuned over several years.

The net result is that we get action signals normally within a day of major price moves or earnings events for more than 6,000 stocks and ADRs. These are not biased signals. We get both upward and downward trend price indicators, and for those stocks that cross our ratings boundaries we issue recommendation changes to buy, hold or sell.

This objective standard creates ratings on published results, consensus earnings estimates, and real price moves -- not rumors. It is also provides a very convenient way to keep track of the relative values of stocks.

I could go on and detail the micro-steps, none of which could be replicated without a Ph.D. in statistics and five years dedicated to the effort, but what really matters is results. With that said, here are five examples of stocks in different sectors that we rated as buys as of April 1, 2006. We also discuss their outcome over the last 12 months and why we still like them.

So here's the director's cut: five top picks that are still attractive:

• Allegheny Technologies (ATI Quote) (Materials)

We issued a buy rating on July 28, 2005, at $28.70. The stock closed yesterday at $109.91 and is still attractive as a play on the metals cycle.