Louis Navellier's Blue Chip Growth Letter
7811 Montrose Road, Potomac, Md. 20854
July ~ Lately, many former flagship stocks, such as Costco, McDonald's and Procter & Gamble, have issued earnings warnings. Fortunately, none of these stocks is on the Buy List, but the few remaining flagship stocks that are performing well on our Buy List, such as Cisco Systems, Oracle and Sun Microsystems, are selling at extremely high price-to-earnings ratios. These flagship stocks continue to prosper because 90% of the money that's flowing into the stock market is chasing fewer than 10% of the stocks, and we have a high proportion of the favored 10%.
Although my reward/risk analysis still grades Cisco, Oracle and Sun as buys, the mid-capitalization stocks like Calpine, Cypress Semiconductor, Vishay and others (under $10 billion in market value) have much more reasonable P/E ratios than the Cisco-type big-cap stocks.
As a result, the leadership of the stock market (and our Buy List) continues to shift away from stocks that have become household names, and more toward the rising stars.
-LOUIS NAVELLIER
Barrons July 10th. |
