Sector and Industry Segmentation for Top Stock Picks

Most of the earlier posts on this web log have related to both business management and to stock investment. Very senior executives and business owners have rare opportunities to consider new sectors and industries for entry. However, all genres of stock investors have to decide on this kind of segmentation at least once every few months.


Does your stock portfolio need a reshuffle? Here are some leads from creative segmentation:

1. A corporation may be in the wrong category. It may have changed the nature of its business, while its stock exchange basks in the past. Here is a link to new revenue lines of a tobacco company:

http://www.itcportal.com/


2. A particular sector may move contrary to the general economic trend. The Basic Materials Sector for example, has appreciated by more than 30% in the 12 months ended May 2008, against a 10% decline in the S&P 500. The Capital Goods Sector, on the other hand, has declined by 20% during the same period.


3. All industry members of a sector do not move in unison. Though Basic Materials have appreciated, the Chemical Manufacturing part of this sector, has declined over the past year. Similarly, the Construction and Agricultural Industry has appreciated by 10% over the past year, though its parent sector has declined.


4. Individual stocks can be identified by the Beta they achieve. Here is a link to a member of the sluggish Chemical Manufacturing Industry, which the stock market values 90% higher than a year ago:


http://www.praxair.com/


5. Some investors are ruthless, and segment only by dividend track records. Who can argue with a company started by a Guru, with more than 60% dividend growth over five years, more than 40% Payout Ratio, and less than 22 for a Price to Equity Ratio?

Post below or send an email to StockWay.MyView@gmail.com

if you fail to guess to which stock point five above pays tribute.

We will move on to targeting for the coming week-end.