A bank and three specialty finance companies were among 28 firms that won "strong buy" ratings from Gruntal & Co. Monday, when the investment house introduced the stock rating category to identify its top picks.

Hibernia Corp., MBNA Corp., Contifinancial Corp., and Beneficial Corp., which had been rated "outperform," were upgraded to the new category.

"We wanted to distinguish those companies that have the best potential," said analyst Katrina Blecher, who covers banks and financial services companies for Gruntal.

Gruntal "looked for companies with 20% upside over the next 12 months," Ms. Blecher explained. A number of strong companies, including BankAmerica Corp., were left in the "outperform" category because their share prices already have risen, Ms. Blecher said.

Shares of Hibernia Corp., New Orleans, which were off 12.5 cents Monday, to $13.25, are likely to benefit from strong economic growth in Louisiana, the analyst said. Indeed, its No. 2 market share in the state makes Hibernia an acquisition target, Ms. Blecher said.

"MBNA's stock performance has been outstanding, and so has their earnings performance," said Ms. Blecher, predicting that the credit card specialist would continue to shine.

Its earnings could grow as much as 25% this year, she said, because the Newark, Del., company has learned to exploit an affinity card niche that is "untouchable by other credit card companies." Shares of MBNA were off 12.5 cents to $36.75.

New York-based Contifinancial is a company whose shares have been caught in the downdraft of Mercury Finance Co.'s accounting scandal. Contifinancial shares were off $2.75, to $34. But Ms. Blecher said the subprime home equity specialist should not be tarred with the same brush as the subprime auto lenders.

Conti lends a relatively small percentage of the value of the homes securing its loans, she said, and generates additional income and earning potential through its venture capital program.

Beneficial, another home equity lender, has become more aggressive in the credit card arena lately, Ms. Blecher said. She noted its promising affinity card programs with Kmart and Price Costco.

"I'm looking for 20% growth this year and, long-term, 15%" for Beneficial, Ms. Blecher said.

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