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44 Ways To Combat the Pinch

April 1, 2013

Before you do anything else today, I want you to circle next Monday, April 8 on your calendar. That's when Alcoa Inc. (AA) kicks off first-quarter earnings season—and I suspect that's when the breadth and power of the stock market will start to deteriorate. That's because of an earnings shakeout is about to unfold.

It's no secret that analysts expect just 1.5% earnings growth for the S&P 500—I've been talking about it for weeks. However, lately, some of the market's bellwethers have broken down due lower earnings guidance: Caterpillar Inc. (CAT), Deere & Company (DE), FedEx Corp. (FDX) and Oracle Corp. (ORCL), to name a few.

Now, the reason that we're seeing big multinationals getting hit is the stronger U.S. dollar. Between Britain's credit downgrade, Italy's botched elections and Cyprus banking drama, the U.S. dollar has looked relatively attractive next to the pound and the euro. Because multinationals get paid in foreign currencies, their profits get pinched when those currencies depreciate against the U.S. dollar.

Of course, I've already established that now's not the time to cash out. We simply have to take precautions in order to ensure profits in this market. So to prepare let's look at the 44 big blue chips that have been upgraded and downgraded this weekend. After taking a close look at the latest data on institutional buying pressure and each company's fundamental health, I decided to revise my Portfolio Grader recommendations for each of the stocks listed below.


Last Week's Holds, Now Buys

Symbol Company Name Quantitative Grade Fundamental Grade
ACN Accenture PLC B B
ED Consolidated Edison Inc. B C
ETP Energy Transfer Partners L.P. B C
KORS Michael Kors Holdings Ltd. C A
LPL LG Display Co. Ltd. ADS B C
NLSN Nielsen Holdings N.V. B C
NOC Northrop Grumman Corp. B B
PAYX Paychex Inc. B C
RTN Raytheon Co. B C
SNN Smith & Nephew PLC ADS B C
SO Southern Co. B B
TRI Thomson Reuters Corporation B C
WDC Western Digital Corp. C B
WM Waste Management Inc. B C

Last Week's Sells, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
BBD Banco Bradesco S/A ADS D C
BHI Baker Hughes Inc. C D
EOG EOG Resources Inc. C D
HPQ Hewlett-Packard Co. C D
MFC Manulife Financial Corp. D B
MOS The Mosaic Co. D C
PLD Prologis Inc. C C
TS Tenaris S.A. ADS D C
VOD Vodafone Group PLC ADS C C
YUM Yum! Brands Inc. C C


Last Week's Buys, Now Holds

Symbol Company Name Quantitative Grade Fundamental Grade
AGN Allergan Inc. C C
BX Blackstone Group L.P. C B
CHT Chunghwa Telecom Co. Ltd. ADS C C
GE General Electric Co. C C
GGP General Growth Properties Inc. B C
PCP Precision Castparts Corp. C C
PNR Pentair Ltd. C D
SYK Stryker Corp. C C

Last Week's Holds, Now Sells

Symbol Company Name Quantitative Grade Fundamental Grade
CAH Cardinal Health Inc. D B
CNCO Cencosud SA ADR D B
F Ford Motor Co. D C
FAST Fastenal Co. D C
GM General Motors Co. D C
JPM JPMorgan Chase & Co. D B
KYO Kyocera Corp. ADS D D
PXD Pioneer Natural Resources Co. D D
STJ St. Jude Medical Inc. D C
UNH UnitedHealth Group Inc. D B
WLP WellPoint Inc. D B


Louis Navellier

Louis Navellier

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