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S&P POWERPICKS PORTFOLIO
By Ken Shea, Steve Biggar, and Robert Gold
OCTOBER 4, 2005

http://yahoo.businessweek.com/investor/content/oct2005/pi2005104_9698_pi071.htm

PowerPicks Pull Ahead in September
The portfolio of S&P analysts' top selections topped the S&P 500 for the month, led by stocks like ValueClick and TXU


The S&P PowerPicks 2005 portfolio -- representing S&P analysts' top picks for the year -- solidly outperformed its benchmark, the S&P 500-stock index, in September. For the month, the portfolio returned 1.36%, vs. the S&P 500's gain of 0.81%, both including dividends.

The portfolio's top gainers on the month included ValueClick (VCLK ), up 18%; TXU (TXU ), up 16%; Burlington Northern Santa Fe (BNI ), up 13%; Devon Energy (DVN ), up 13%; and Qualcomm (QCOM ), also up 13%.

The members of the portfolio that fared the worst in September included Invitrogen (IVGN ), down 11%; Pacific Sunwear (PSUN ), down 10%; Commerce Bancorp (CBH ), down 9%; Waters (WAT ), down 9%; and Best Buy (BBY ), also down 9%.

Year-to-date through Sept. 30, the portfolio has generated total return of 9.4%, vs. a 2.8% return for the "500".

About the S&P PowerPicks 2005 Portfolio

The portfolio represents the collective "best ideas" of the Standard & Poor's equity research staff.

Each of the most senior 40 industry analysts on S&P's equity research staff has chosen one of the stocks they follow as the best-positioned for superior growth. The S&P PowerPicks 2005 Portfolio is diversified across all the 10 S&P economic sectors that make up the S&P 500 index.

The portfolio is a "frozen" one, meaning it will undergo no changes throughout the entire year. Its objective is to exceed the total return (capital appreciation plus dividends paid) generated by the S&P 500 index during the next 12 months.

THE S&P POWERPICKS 2005 PORTFOLIOTicker Company Mkt. Cap ($ Mln) S&P Earns & Divd Rank S&P Index STARS Dividend Yield (%) Subindustry
Consumer Discretionary
BBY Best Buy 18,290 B 500 5 0.8 Computer & Electronics Retail
GTRC Guitar Center 1,225 NR 600 5 - Specialty Stores
HET Harrah's Entertainment 6,881 B 500 5 2.1 Casinos & Gaming
LQI La Quinta 1,513 C None 5 - Hotels Resorts & Cruise Lines
NWS News Corp. 52,569 NR None 5 - Movies & Entertainment
PSUN Pacific Sunwear of California 1,647 B+ 400 5 - Apparel Retail
Consumer Staples
BF.B Brown-Forman 5,959 A 500 5 1.8 Distillers & Vintners
CHTT Chattem 717 B None 5 - Personal Products
PEP PepsiCo 84,072 A+ 500 5 1.8 Soft Drinks
WAG Walgreen Co. 39,019 A+ 500 5 0.6 Drug Retail
Energy
CVX ChevronTexaco 115,676 B+ 500 5 2.9 Integrated Oil & Gas
DVN Devon Energy 20,131 B+ 500 5 0.5 Oil & Gas Exploration & Production
NBR Nabors Industries 7,775 B 500 5 - Oil & Gas Drilling
Financials
ALL Allstate 34,654 B+ 500 5 2.2 Property & Casualty Insurance
C Citigroup 232,241 A+ 500 5 3.6 Other Diversified Financial Services
CBH Commerce Bancorp 4,956 A+ 400 5 1.2 Regional Banks
GS Goldman Sachs Group 50,723 NR 500 5 1.0 Investment Banking & Brokerage
NDE IndyMac Bancorp 2,181 B+ 400 5 4.2 Thrifts & Mortgage Finance
SPG Simon Property Group 13,770 B+ 500 5 4.2 Real Estate Investment Trusts
Health Care
COO Cooper Cos. 2,275 B 600 5 0.1 Health Care Supplies
IVGN Invitrogen 3,099 B- 400 5 - Biotechnology
KCI Kinetic Concepts 4,339 NR None 5 - Health Care Equipment
PDLI Protein Design Labs 1,731 C 400 5 - Biotechnology
WAT Waters Corp 5,638 B 500 5 - Health Care Equipment
WLP WellPoint 14,063 NR 500 5 - Managed Health Care
Industrials
ASD American Standard 8,353 B- 500 5 - Building Products
BNI Burlington Northern Santa Fe 16,932 A- 500 5 1.5 Railroads
FDX FedEx 28,563 B+ 500 5 0.3 Air Freight & Logistics
IR Ingersoll-Rand 12,816 A 500 5 1.3 Industrial Machinery
KDN Kaydon Corp 916 A- 600 5 1.5 Industrial Machinery
Information Technology
ADP Automatic Data Processing 26,523 A+ 500 5 1.2 Data Processing & Outsourced Services
DELL Dell Inc. 101,163 B+ 500 5 - Computer Hardware
EMC EMC Corp 32,158 B 500 5 - Computer Storage & Peripherals
MXIM Maxim Integrated Products 13,322 B+ 500 5 1.0 Semiconductors
MSFT Microsoft 291,467 B+ 500 5 1.2 Systems Software
QCOM Qualcomm 68,219 B 500 5 0.7 Communications Equipment
VCLK ValueClick 1,046 NR None 5 - Internet Software & Services
Materials
DOW Dow Chemical 47,592 B 500 5 2.7 Diversified Chemicals
Telecommunications Services
CTL CenturyTel 4,430 A 500 5 0.7 Integrated Telecommunication Services
Utilities
TXU TXU Corp. 18,293 B 500 5 0.8 Electric Utilities



Shea is director of Global Equity Research, Biggar is director of U.S. Equity Research and Gold is senior portfolio group analyst, for Standard & Poor's Equity Research

All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report.
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