TiVo, 9 more stocks to watch

11:00 AM stocks, watch No Comments

The pioneer of the digital video recorder (DVR) tops StockScouter's latest list of 10 recommended stocks.

Compiled from StockScouter ratings by Verus Analytics

As the holiday shopping season picks up steam, StockScouter's latest list of 10 top stocks to watch right now is a virtual shopping cart full of consumer-focused stocks, including media and entertainment giant Walt Disney (DIS), coffee chain Starbucks (SBUX), apparel retailer TJX (TJX) and household name Procter & Gamble (PG).

But leading the pack with a score of 10 -- the best possible rating -- is digital video recording pioneer TiVo (TIVO).

Based on StockScouter's analysis, TiVo shares are expected to outperform the market over the next six months with average risk. Earnings growth this year has accelerated compared to the past three years, according to the StockScouter report.

In addition, TiVo has been exceeding estimates for revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) in recent quarters and appears to have solid fundamental momentum.

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Public Service Enterprise Group (PEG)

We think the StockScouter rating system from Verus Analytics and MSN Money is one of the best tooks you can use when you're trying to decide where to invest.

StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.

The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility.

Scouter rates stocks on a scale of 1 to 10, and ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.

In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.

An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 915% through Aug. 31, 2013.

Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool.

Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.