The Best of the Best Report - 12.28.14

By Top Guns Trading Team

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We focus our attention on the top rated stocks of the market for a few simple reasons. The top stocks have the best earnings strength. The top stocks have strong fundamentals. And the top stocks are found in the top ranked industry groups. So from our perspective, the top stocks put the odds in our favor before we ever enter a buy order. So, why would anyone invest in anything else?

Each week the computers scour our universe of the most liquid stocks traded in the United States for the Top Stocks (the stocks with the top ratings in the top industry groups). But for this report, we are looking only for the absolute "the best of the best" -- those stocks rated 10.0 out of a possible 10.0

Listed below are a few of the "10.0 Stocks" our team feels are worthy of attention for this week.

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Company Symbol Stock Rating Sector Industry Current Rating Trading Stop
Pepco Holdings POM 10.0 Utilities Electric Utilities Buy $26.29


 
Edison International EIX 10.0 Utilities Electric Utilities Hold $64.89


 
Health Net HNT 10.0 Health Care Managed Health Care Accumulate $51.89


 
Centene Corporation CNC 10.0 Health Care Managed Health Care Hold $100.89


 
Molina Healthcare MOH 10.0 Health Care Managed Health Care Hold $52.29


 

Disclosure:
At the time of publication the editor and affiliated companies own the following positions: none

Note: Positions may be bought or sold while this publication is in circulation without notice.

Stock Rating:
The Top Stock Rating indicates the combined score of our proprietary Earning Strength and Company Performance models. The rating scale is 0 - 10 with 10 being the highest.

Current Rating:
The Current Rating is designed to let readers know what we would do now if we did NOT currently hold the position.

  • Strong Buy: Our favorite position - We would be willing to buy a full position at current levels.
  • Buy: We would be willing to buy at current levels.
  • Accumulate: We would be willing to take a "starter position" (25% - 33% of the full position) at current levels. However, we would not want to buy a full position at the current time but would look to add to our "starter position" on weakness.
  • Hold: We prefer to hold our position at the current levels - but we would not be buyers at this time.
  • Sell: We are not happy with this position and are looking for an exit point.

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Do Ratings Really Matter?

We certainly think so, but sometimes it is best to let the numbers do the talking. Below is a table showing the average annualized returns for each rating category, as determined by historical testing done by one of the country's largest independent institutional research firms.

Stock Rating Average AnnualReturn
9.0 - 10.0 +32.9%
8.0 - 8.9 +23.2%
7.0 - 7.9 +11.9%
6.0 - 6.9 +10.5%
5.0 - 5.9 +6.6%
4.0 - 4.9 +4.1%
3.0 - 3.9 +2.7%
2.0 - 2.9 -0.4%
1.0 - 1.9 -5.3%
0.0 - 0.9 -6.6%

The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors of stateofthemarkets and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Stocks should always consult an investment professional before making any investment.

Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security