Temper Pedic International Still Offers Value After 10% Jump

Ascendere Weekly Ranking Update:  January 21, 2011

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Every week, we include in this report a list of the highest quality and lowest quality stocks as defined by four key factors: 1) Relative Value; 2) Operating Momentum; 3) Analyst Revision Momentum; and 4) Fundamental Quality.  At the end of each month, we take roughly 1/3 of the stocks on this list to construct our various long/short and long-only model portfolios based on real trade data.  But as you can read below, there are several other ways to use this data.

This week 68 stocks make the “high-quality” list versus 63 last week, with 15 additions and 10 deletions.  28 stocks make the “low-quality” list compared to 28 last week, with 5 addition and 5 deletions.  Technology and Energy continue to generate an increasing number of new ideas.  The most intriguing idea this week is Temper Pedic International (TPX), a manufacturer and marketer of bedding products worldwide.

Three ways to use this newsletter:

• Build your own hedge fund. Use data in this report at discretion or as an enhancement to our model portfolio strategy newsletter.

• Anticipate sell side research ratings changes. It is not uncommon to find these stocks presaging changes to sell side price targets, ratings or conviction lists.

• Generate relevant long-term ideas for further study. Buy and hold still does work.  We do the heavy lifting and find you “high-quality” stocks; you provide the incremental research time and effort.

Examples of just a few recent sell side actions that we have presaged since December 31, 2010

• 1/21/2011 — Parker-Hannifin Corp (PH) — Citigroup raises target to $100 from $94, citing recent sell off as a buying opportunity.
• 1/20/2011 — Macy's, Inc. (M) — Credit Suisse names the stock its top pick for 2011 after previously upgrading on 1/11.
• 1/20/2011 — TRW Automotive Holdings Corp. (TRW) — Soleil raised its price target to $71 from $59.
• 1/19/2011 — Avnet Inc. (AVT) — UBS raises price target to $42 from $40.
• 1/19/2011 — Waddell & Reed Financial, Inc. (WDR) — Stifel Nicolaus raises rating to Buy from Hold.

Please review our Disclosures and Disclaimers.