Reaching to the STARS

I have spent a lot of time in the past few weeks talking about findings and conclusions based on the Value Line Research Service. I have often said that if I could only have one service this would be the one. That statement is true, but fortunately, I do not have to rely on just one service. I am also a big fan of the research put out by Standard and Poor's Equity Research. The service uses a variety of fundamental factors to derive a rating of 1-to-4 stocks. Stocks with the two highest four- and five-star rankings are expected to outperform the overall stock market. Since Standard and Poor's does not rely as heavily on momentum as Value Line does, it gives me another perspective when searching for ideas.

I sat down this morning and ran a screen for stocks that trade below book value and receive one of the two highest rankings form the service. The most obvious finding is that I should run this screen a lot more often. The screen results bear a strong resemblance to my portfolio. The one five-star cheap stock is one of my favorites right now. I own Kelly Services (KELYA), the professional staffing and temporary personnel company and think the stock is too cheap not to own. It has moved up a little from my original purchase price but it is still very cheap on a book value basis....600 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.