50 stocks to buy in September

Despite historic single-day gains and losses in August, stocks ended the month on a relatively high note, with the Dow Jones Industrial Average ($INDU)returning to positive territory for 2011.

Yet the market's violent swings underscore just how difficult a time traders have had reading the economic tea leaves.

Given so much ambiguous data, it's no wonder many on Wall Street are looking to Federal Reserve Chairman Ben Bernanke to provide some certainty three weeks from now, when the Federal Open Market Committee meets to weigh the pros and cons of further quantitative easing.

The market wants the Fed to ease, so it may not react positively to intervening signs of economic recovery. But if recent trends hold, anyone who dislikes a particular set of numbers won't have to wait long for data that paint a different picture.

For investors seeking reliable clues about what's working in the market, StockScouter's Benchmark Portfolio for September is an ideal place to start investment research.

The 50-stock portfolio was created using StockScouter, MSN Money's stock-picking tool. Each month, StockScouter generates a list of 50 stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the coming weeks, based on how those factors have influenced stock prices in the past.

Here are StockScouter's best investment ideas for September:

Put StockScouter to work

Investment research firm Gradient Analytics uses StockScouter to create daily and monthly stock lists. Writer Jon Markman, at the time a columnist for MSN Money, collaborated with the company to devise strategies for puttingthe tool to work.

One of Markman's strategies involved investing an equal amount of money in each of the stocks in the computer-generated portfolio, selling them six months later, then beginning the process again. For investors who prefer to handle fewer stocks, Markman recommended using the strategy with just the top 10 stocks on the list.

An investor who followed Markman's 10-stock strategy since it was launched in January 2001 would have realized a gain of 698% through Aug. 31 of this year, according to Gradient Analytics, and had an average annual return of 22.5%.

Over the same period, the S&P 500 rose by 0.6%.

An innovative mix

StockScouter depends on advanced mathematics and software and an innovative mix of measurements and historical testing to forecast the short- and long-term outlook for all U.S. companies that have traded on the major exchanges for at least the past six months.

The analytical tools score stocks on fundamental, valuation, technical and ownership components.

This score is combined with each company's StockScouter rating to come up with the list in the above chart. Only stocks with a final closing price above $3 are eligible for the list.