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Stock picks of the week
By Deborah Adamson - CBS.marketwatch.com
REDMOND, Wash, (CBS.MW) - Will the incumbents on Wall Street win, or will there be a populist rout?
To find out, CBS.MarketWatch spoke with EPredict.com founder Scott Pederson. EPredict polls investor expectations and likely behavior, then analyzes the results to predict future stock performance.
His company uses these techniques to come up with buy and sell recommendations for hundreds of stocks.
"Political polls (work). I apply the same theory to investing," he said.
Since the company started the investor poll last October, the more than 300 stocks it tracks has outperformed the S&P; 500 by 26 percentage points, Pederson said. Its basket of technology stocks has outpaced the Nasdaq by 68 percentage points.
Each trading session, EPredict.com asks investors to rank a list of stocks on a five-point scale, from "strong buy" to "strong sell." The results are tabulated and analyzed, then sent to its registered users by e-mail before the market opens the next day.
This week's strong buys include EMC Corp. (EMC: news, msgs), Pfizer (PFE: news, msgs), Sun Microsystems (SUNW: news, msgs), Johnson & Johnson (JNJ: news, msgs) and Hewlett-Packard (HWP: news, msgs).
Strong sells include NextCard (NXCD: news, msgs), Good Guys (GGUY: news, msgs), 1 800 Flowers.com (FLWS: news, msgs) and Ames Department Stores (AMES: news, msgs).
EMC's hardware and software products store and manage massive amounts of data for its corporate clients.
The company recently told analysts that growth would be faster in the second half of the year than the 43 percent increase in sales it reported in the second quarter.
This week, EMC's McData Corp. unit (MCDT: news, msgs), which provides switches and software for connecting servers and storage systems, went public at $28 a share. Company profile, financials and analysts' recommendations.
Pfizer, a maker of anti-impotence drug Viagra, recently merged with rival Warner-Lambert to create the second largest pharmaceutical company in the world.
Earlier this month, researchers found that Viagra could provide relief to millions of diabetics who suffer from gastroparesis, a stomach ailment that can lead to vomiting, dehydration and loss of appetite. Company profile, financials and analysts' recommendations.
Sun Microsystems, computer hardware and software maker as well as the developer of the Java programming language, hit a 52-week high of 111 7/8 this week.
Last year, the company's sales rose 34 percent and earnings per share grew 73 percent. Sun has no long-term debt and its return on equity, a measure of how well it manages money, is a high 31. Company profile, financials and analysts' recommendations.
Johnson & Johnson
Johnson & Johnson, a maker of health care products such as Band-Aid and Tylenol, through its Janssen subsidiary recently received a letter of approval from the U.S. Food and Drug Administration for its new Alzheimer's drug.
An approval letter from the FDA means the government agency is prepared to approve the new drug application once the company meets labeling and other requirements, Johnson & Johnson said.
The company also recently reported record second quarter sales and profits, which beat analysts' expectations.Company profile, financials and analysts' recommendations.
Hewlett-Packard (HWP: news, msgs) is teaming up with AT&T; (T: news, msgs) to develop ways for global companies to address networking and management needs of e-businesses.
Forbes.com recently hailed CEO Carly Fiorina as the next Lou Gerstner, the head of IBM (IBM: news, msgs), as she helps to drive H-P's revenue and earnings growth. Company profile, financials and analysts' recommendations.