This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stock-Market Bullishness Rises as Prices Fall

BOSTON ( TheStreet Ratings) -- When I last provided a review of the TheStreet Ratings' quantitative equity model on April 18, the S&P 500 Index stood at 1,305 and investors were starting to show signs of worry about the economy.

Standard & Poor's had also just put the U.S.'s AAA rating on a "negative" outlook, sending the stock market down by more than 2%, with the implication that the country's stellar rating was falling as debt was rising.

At the time, I noted that our model remained bullish, rating 37% of the 6,000 stocks we cover a "buy," up from 20% at the beginning of 2010. With the S&P 500 down 3.7% since then, the model has become even more bullish, with 40% (as of June 22) now rated "buy."

As I pointed out in another recent article, stocks are cheap on a price-to-earnings basis, with the S&P 500 trading at just 13 times 2011 estimates. So what does the model like? I took a look at its favorite industries, and scouted for what might have changed since the April review.

In the table below, I've listed the top 10 industries that have shown improved ratings since the last check on April 13.

Next to each industry, I listed the percentage of "buys," "holds" and "sells" along with a buy-sell ratio to gauge the level of bullishness. The last column compares this measure to last month. For example, while the model is somewhat neutral on paper and forest-products stocks, the ratings have improved since April, as three moved from "sell" to "buy."

I've broken down each industry to give some insight into what the model likes:

Household Products:

Of the 13 stocks in the industry, the model rates 11 (or 85%) "buy," a 46% improvement in the overall bullishness rating (%buy-%sell) from April 13.

Highest-Rated Stock: Church & Dwight (CHD - Get Report) -- Rating: A+

What's Changed?: Central Garden and Pet (CENT - Get Report) upgraded to "buy" from "hold," Ocean Bio Chem (OBCI - Get Report), upgraded to "buy" from "hold."

Paper and Forest Products:

Of the 20 stocks in the industry, the model rates nine (or 45%) "buy," a 30% improvement in bullishness (%buy-%sell) from April 13.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CENT $13.24 6.17%
CHD $84.85 1.11%
GWW $223.03 1.96%
MCD $96.04 2.75%
OBCI $2.65 2.71%

Markets

Chart of I:DJI
DOW 16,351.38 +293.03 1.82%
S&P 500 1,948.86 +35.01 1.83%
NASDAQ 4,749.9790 +113.8740 2.46%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs