Yesterday, I wrote about the outperformance of stocks in December that had an “A” rating in November.  Our analysis shows that positions that experience dramatic ratings changes from A to F and F to A tend to outperform the markets.

Here are the 5 positions for January that moved from “F” to “A” in December, meaning good investors are buying:

Rating From F to A
Symbol    Name    Industry    December Return
CBI    Chicago Bridge and Iron    Construction    23.57%
DUG    ProShares UltraShort Oil & Gas     Energy    -30.81%
IJH    iShares S&P MidCap 400 Index    Index    16.56%
MWTRX    Metropolitan West Total Return Bond M    Bond    -24.35%
SWINX    Schwab International Index    Foreign Large Blend    48.60%

Total December Return        6.72%

And here are the 22 positions that went from A to F rating:

Symbol    Company    Industry    December Return
ARAY    Accuray Incorporated    Medical    27.09%
BRK.B    Berkshire Hathaway    Conglomorate    -2.01%
DD    DuPont    Conglomorate    13.86%
DNR    Denbury Resources Inc.    Energy    25.66%
DWSN    Dawson Geophysical Company    Energy    -6.41%
EFV    iShares MSCI EAFE Value Index    Foreign ETF    18.26%
ERTS    Electronic Arts    Entertainment    -9.74%
FXY    CurrencyShares Japanese Yen Trust    Currency    2.92%
GD    General Dynamics Corp.    Industrial    18.64%
GHM    Graham Corp    Industrial    30.36%
GRMN    Garmin Ltd.    Technology    23.44%
IAU    ISHARES COMEX GOLD    Commodities    14.34%
MKL    Markel Corp.     Insurance    21.92%
MS    Morgan Stanley    Financials    41.32%
O    Realty Income Corp.    Real Estate    43.81%
ODP    Office Depot, Inc    Services    63.74%
PGF    PowerShares Financial Preferred    Financials    16.10%
RSX    Market Vectors Russia ETF    Foreign ETF    7.08%
SSO    Ultra S&P500 ProShares    Index    19.41%
STO    StatoilHydro ASA    Energy    11.89%
TSL    Trina Solar Ltd    Energy    9.29%
VTV    Vanguard Value ETF    Index    12.41%

Total December Return        18.34%

The key takeaway is that good investors seem to be taking the money off the table once these positions had a nice run in December.  Notice that foreign, energy and financials, sectors that were overly impacted by the market turmoil saw a nice bounce.

We’ll check back with these next month.  Good luck.