Despite a 16-day government shutdown that threatened to suck the wind out of the economy, the Standard & Poor's 500 Index ($INX) hit an all-time high in October and gained 4.5 percent on the month. With the debt-ceiling standoff behind us -- at least for the moment -- and the holiday shopping season approaching, there's reason to think stocks could finish the year on a high note. Indeed, the market historically delivers its best returns from November through April.
However, corporate earnings have been mixed, and more than a few analysts see warning signs of an overheated market. And while the Federal Reserve left its policy unchanged this week, it could still decide to start "tapering" its market-boosting bond-buying program before the year is out.
For investors seeking reliable clues about what's likely to work in this market, StockScouter's benchmark portfolio for November is an ideal place to launch investment research.
The portfolio was created using StockScouter, MSN Money's stock-picking tool. Each month, StockScouter generates a list of 50 stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the coming weeks, based on how those factors have influenced stock prices in the past.
Click through this slide show, published Oct. 31, for a detailed look at 10 of Scouter's best investment ideas for November, followed by a list of all 50 stocks in Scouter's benchmark portfolio for the month. (All StockScouter data are as of Oct. 31.)
StockScouter quick summary, pro:
Earnings growth in the past year has accelerated moderately compared to earnings growth in the past three years. Positive
The ratio of TIVO's price-to-earnings multiple to its five-year growth rate is slightly below the average of all stocks in the StockScouter universe. Positive
The price-to-earnings multiple is lower than average for all stocks in the StockScouter universe. Positive
StockScouter quick summary, con or neutral:
One or more analysts has modestly decreased quarterly earnings estimates for TIVO. Negative
StockScouter quick summary, pro:
The StockScouter measure of relative price change and consistency is very high. Very positive
Earnings growth in the past year has accelerated rapidly compared to earnings growth in the past three years. Positive
Two or more executives, directors or major shareholders purchased a large number of shares recently. Very positive
StockScouter quick summary, con or neutral:
The price-to-earnings multiple is a negative number. No effect
StockScouter quick summary, pro:
The most recent quarterly earnings report was much higher than analysts’ consensus forecast. Positive
One or more analysts has significantly increased quarterly earnings estimates for BTU. Positive
Previous day's closing price for BTU was slightly above its 50-day moving average. Positive
StockScouter quick summary, con or neutral:
The price-to-earnings multiple is a negative number. No effect
StockScouter quick summary, pro:
The StockScouter measure of relative price change and consistency is very high. Very positive
Previous day's closing price for CHK was slightly above its 50-day moving average. Positive
The most recent quarterly earnings report was significantly higher than analysts’ consensus forecast.Positive
StockScouter quick summary, con or neutral:
The price-to-earnings multiple is a negative number. No effect
StockScouter quick summary, pro:
The StockScouter measure of relative price change and consistency is very high. Very positive
One or more analysts has modestly increased quarterly earnings estimates for CMCSA. Positive
Previous day's closing price for CMCSA was slightly above its 50-day moving average. Positive
StockScouter quick summary, con or neutral:
Shares are being heavily sold by financial institutions. Neutral for a large company like CMCSA
StockScouter quick summary, pro:
The StockScouter measure of relative price change and consistency is very high. Very positive
Earnings growth in the past year is holding steady compared to earnings growth in the past three years.Neutral
One or more analysts has modestly increased quarterly earnings estimates for DIS. Positive
StockScouter quick summary, con or neutral:
Shares are neither being accumulated heavily nor sold heavily by financial institutions. Neutral for a large company like DIS
StockScouter quick summary, pro:
The price-to-sales multiple is significantly higher than the average for all stocks in the StockScouter universe.Very positive for a medium- to large-sized company like SBUX
Earnings growth in the past year is holding steady compared to earnings growth in the past three years.Neutral
One or more analysts has modestly increased quarterly earnings estimates for SBUX. Positive
StockScouter quick summary, con or neutral:
The price-to-earnings multiple is higher than the average for all stocks in the StockScouter universe.Negative
StockScouter quick summary, pro:
The price-to-earnings multiple is lower than average for all stocks in the StockScouter universe. Positive
Earnings growth in the past year has accelerated rapidly compared to earnings growth in the past three years. Positive
Previous day's closing price for SPF was slightly above its 50-day moving average. Positive
StockScouter quick summary, con or neutral:
The StockScouter measure of relative price change and consistency is low. Negative
StockScouter quick summary, pro:
The StockScouter measure of relative price change and consistency is very high. Very positive
One or more analysts has modestly increased quarterly earnings estimates for WEN. Positive
Previous day's closing price for WEN was slightly above its 50-day moving average. Positive
StockScouter quick summary, con or neutral:
Shares are neither being accumulated heavily nor sold heavily by financial institutions. Neutral for a large company like WEN
TJX
StockScouter quick summary, pro:
Earnings growth in the past year is holding steady compared to earnings growth in the past three years.Neutral
One or more analysts has modestly increased quarterly earnings estimates for TJX. Positive
The StockScouter measure of relative price change and consistency is high. Positive
StockScouter quick summary, con or neutral:
Shares are neither being accumulated heavily nor sold heavily by financial institutions. Neutral for a large company like TJX
Company Name
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TiVo (TIVO) -- Scouter score: 9
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Weatherford International (WFT) -- Scouter score: 9
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Peabody Energy (BTU) -- Scouter score: 9
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Chesapeake Energy (CHK) -- Scouter score: 9
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Comcast (CMCSA) -- Scouter score: 9
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Walt Disney (DIS) -- Scouter score: 9
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Starbucks Corporation (SBUX) -- Scouter score: 9
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Standard Pacific (SPF) -- Scouter score: 9
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Wendy's (WEN) -- Scouter score: 9
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TJX (TJX) -- Scouter score: 8
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Alcoa (AA) -- Scouter score: 8
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Boeing (BA) -- Scouter score: 8
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ConocoPhillips (COP) -- Scouter score: 8
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CVS Caremark (CVS) -- Scouter score: 8
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Deere & Co (DE) -- Scouter score: 8
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Twenty-First Century Fox (FOXA) -- Scouter score: 8
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Kroger (KR) -- Scouter score: 8
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Nike (NKE) -- Scouter score: 8
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Spectra Energy (SE) -- Scouter score: 8
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Weyerhaeuser (WY) -- Scouter score: 8
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Xcel Energy (XEL) -- Scouter score: 8
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Yahoo (YHOO) -- Scouter score: 8
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American International Group (AIG) -- Scouter score: 10
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Bristol-Myers Squibb (BMY) -- Scouter score: 10
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Cadence Design Systems (CDNS) -- Scouter score: 10
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Huntington Bancshares (HBAN) -- Scouter score: 10
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Intel (INTC) -- Scouter score: 10
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KeyCorp (KEY) -- Scouter score: 10
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Oracle (ORCL) -- Scouter score: 10
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SanDisk (SNDK) -- Scouter score: 10
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Visa (V) -- Scouter score: 10
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Apple (AAPL) -- Scouter score: 9
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Fifth Third Bancorp (FITB) -- Scouter score: 9
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Johnson & Johnson (JNJ) -- Scouter score: 9
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Pfizer (PFE) -- Scouter score: 9
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Synovus Financial (SNV) -- Scouter score: 9
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Texas Instruments (TXN) -- Scouter score: 9
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Wells Fargo (WFC) -- Scouter score: 9
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AbbVie (ABBV) -- Scouter score: 9
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Southwest Airlines (LUV) -- Scouter score: 9
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Morgan Stanley (MS) -- Scouter score: 9
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Annaly Capital Management (NLY) -- Scouter score: 9
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Micron Technology (MU) -- Scouter score: 8
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Qihoo 360 Technology (QIHU) -- Scouter score: 8
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Western Union (WU) -- Scouter score: 8
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Eli Lilly (LLY) -- Scouter score: 8
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DCT Industrial Trust (DCT) -- Scouter score: 8
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NetApp (NTAP) -- Scouter score: 8
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U.S. Bancorp (USB) -- Scouter score: 8
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Mondelez International (MDLZ)-- Scouter score: 8
Investment research firm Gradient Analytics uses StockScouter to create daily and monthly stock lists. Writer Jon Markman, at the time a columnist for MSN Money, collaborated with the company to devise strategies for putting the tool to work.
An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 954% through July 31, 2013.
Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that method would yield different results, which would vary based on your starting point.
StockScouter depends on advanced mathematics and software, as well as an innovative mix of measurements and historical testing, to forecast the short- and long-term outlook for all U.S. companies that have traded on the major exchanges for at least the past six months.
The analytical tools score stocks on fundamental, valuation, technical and ownership components.
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