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Our Picks

Eight New Stocks to Watch

Our coverage list has improved, and here are the highlights.

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Our coverage list of 1,000 stocks just got better. We recently axed dozens of near-defunct dot-com stocks and assorted other riff-raff--VerticalNet (VERT), Polaroid (PRDCQ), Divine (DVIN), Barnes & Noble.com (BNBN), Copper Mountain (CMTN), among many others--and in their place added stocks we might actually have nice things to say about.

In choosing stocks to add, our analysts pick through the industries they cover and select the most interesting companies--companies with either good growth prospects, a strong competitive position, or an innovative business model. We also take into account stocks you've voted to have added (when investors land on an Analyst Report page for a stock or fund we don't cover, they can vote to have it added) as well as favoring larger companies with decent trading volumes.

As for the stocks we've been dropping, most of them are once-popular names from the technology boom of the late 1990s. We disliked most of these stocks long before their death spirals, but because of their former popularity with investors and correspondingly high market caps we felt we needed to step in and voice our opinion. Now, rather than trying to come up with ever new ways of saying "avoid this dog of a stock," we figure our time is better spent covering companies that will actually be around for a while.

Haywood Kelly, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.