10 S&P 500 Stocks Predictive Analysts Expect to Outperform

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Includes: AVGO, CHK, CLF, DE, EBAY, GS, JNPR, KR, MON, MS
by: Kapitall

Here we present an interesting way to search for companies that analysts expect to outperform by using the universe of the S&P 500 index.

Analyst ratings are presented on a linear scale, with 1 = "Strong Buy" and 5 = "Strong Sell." We sliced the analyst ratings data of the S&P 500 companies into three time periods separated by a month, and identified the group of analysts that have shown predictive value, i.e. been able to accurately predict the direction of stock moves for two consecutive time periods.

We further narrowed down the list by only focusing on those stocks that have seen bullish trends in analyst opinion. In other words, predictive analysts, with a proven (short-term) track record of predicting their stock's direction, think these stocks are due for a rebound.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.


Although past performance is no guarantee of future results, the recent accuracy of these analyst ratings suggests their opinions may be a helpful starting-off point for your own analysis.

Do you think these stocks will outperform?

A quick reminder: Analyst ratings moving closer to 1 represent bullish trends, while ratings moving closer to 5 reflect bearish analyst sentiment. All alphas are relative to the S&P 500 index over comparable time periods.

List sorted by market cap.

1. The Goldman Sachs Group, Inc. (NYSE:GS): Mean average rating changed from 1.92 to 1.88 between 04/19/11 and 05/19/11 (bullish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 1.84%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 1.88 to 2.08 (bearish change). Over the following month, the stock generated an alpha of -6.42% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.08 to 2.07 between 6/18 and 7/18 (i.e. bullish change).

2. eBay Inc. (NASDAQ:EBAY) : Mean average rating changed from 2.38 to 2.41 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -7.53%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 2.41 to 2.31 (bullish change). Over the following month, the stock generated an alpha of 11.33% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.31 to 2.19 between 6/18 and 07/18 (i.e. bullish change).

3. Monsanto Co. (NYSE:MON): Mean average rating changed from 2.5 to 2.48 between 04/19/11 and 05/19/11 (bullish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of 4.66%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 2.48 to 2.45 (bullish change). Over the following month, the stock generated an alpha of 8.04% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.45 to 2.4 between 06/18/11 and 07/18/11 (i.e. bullish change).

4. Deere & Company (NYSE:DE): Mean average rating changed from 1.67 to 1.71 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -2.09%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 1.71 to 1.88 (bearish change). Over the following month, the stock generated an alpha of -2.44% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.88 to 1.87 between 06/18/11 and 07/18/11 (i.e. bullish change).

5. Morgan Stanley (NYSE:MS): Mean average rating changed from 2.2 to 2.22 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -3%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 2.22 to 2.29 (bearish change). Over the following month, the stock generated an alpha of -9.71% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.29 to 2.28 between 06/18/11 and 07/18/11 (i.e. bullish change).

6. Chesapeake Energy Corporation (NYSE:CHK): Mean average rating changed from 2.38 to 2.44 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -1.2%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 2.44 to 2.39 (bullish change). Over the following month, the stock generated an alpha of 14.93% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.39 to 2.28 between 06/18/11 and 07/18/11 (i.e. bullish change).

7. Broadcom Corp. (BRCM): Mean average rating changed from 2.1 to 2.14 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -2.08%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 2.14 to 2.07 (bullish change). Over the following month, the stock generated an alpha of 2.36% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.07 to 2.04 between 06/18/11 and 07/18/11 (i.e. bullish change).

8. Juniper Networks, Inc. (NYSE:JNPR): Mean average rating changed from 2.04 to 2.09 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -19.57%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 2.09 to 2.17 (bearish change). Over the following month, the stock generated an alpha of -0.36% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.17 to 2.16 between 06/18/11 and 07/18/11 (i.e. bullish change).

9. The Kroger Co. (NYSE:KR): Mean average rating changed from 2.11 to 2.16 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -0.8%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 2.16 to 2.11 (bullish change). Over the following month, the stock generated an alpha of 3.58% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 2.11 to 2.1 between 06/18/11 and 07/18/11 (i.e. bullish change).

10. Cliffs Natural Resources Inc. (NYSE:CLF): Mean average rating changed from 1.82 to 1.83 between 04/19/11 and 05/19/11 (bearish change). Analysts correctly predicted the direction of the stock over the next month, with the stock generating an alpha of -2%.

Analysts also got it right between 05/19/11 and 06/18/11, with the mean rating changing from 1.83 to 1.79 (bullish change). Over the following month, the stock generated an alpha of 16.82% relative to the S&P 500 index, as predicted by the analysts.

This same group of analysts now expect the stock to outperform in the future, with the mean rating changing from 1.79 to 1.75 between 06/18/11 and 07/18/11 (i.e. bullish change).

*Analyst ratings sourced from Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.