NEW YORK, Nov. 17, 2011 /PRNewswire/ -- S&P Capital IQ Equity Research believes that U.S. stocks are in an extended bull market characterized by high profit margins, but slow economic improvement from depressed levels, according to the latest issue of the group's Quality Trends publication.
"High Quality Ranking* (QR) issues strongly outperformed low Quality Ranking issues in the recent market decline and underperformed only marginally in the October snap-back," said Richard Tortoriello, an S&P Capital IQ equity analyst and author of the report. "We believe slow economic growth and continued market uncertainty bode well for high QR performance going forward."
This issue of Quality Trends also looks at International Quality Rankings (IQRs), which rank nearly 19,000 companies in over 100 countries. The report provides a list of A+ ranked issues globally, a list of select high IQR companies in Brazil and China, and a screen of high IQR issues with high ROE and low price-to-book value.
The countries with the highest percentage of B+ and better IQRs include South Africa (42%), India (28%), China (27%), France (27%), Thailand (25%), and Japan (23%). By contrast, the U.S. has 22% of QR companies ranked B+ or better.The report includes three different high QR strategies:
- A strategy based on dividend growth and dividend yield. The strategy looks for high-yielding stocks that have seen a strong 12-month improvement in the Dividend Score. The Dividend Score is a numerical component of the Quality Ranking, along with the Earnings Score. This is used as a timing indicator.
- An EBIT to invested capital and free cash flow to price strategy, which looks for undervalued stocks (on a free cash flow basis) of companies that are generating strong returns on capital invested in their businesses.
- A strategy based on high QR cyclical stocks (energy, materials, industrials, consumer discretionary, financials, and info tech) and S&P Capital IQ's sector-based multi-factor quant models (QScores). The strategy seeks to identify cyclical stocks for investment during the seasonally strong November through May period.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV