E Large Cap Best & Worst Report, December 9, 2014

Since 2010, our top scoring weekly has outpaced the SPX by a median 376 bps in the following year. The best performers from our list one year ago are RCL up 82%, DAL up 66%, GD up 64%, MU up 58%, and INTC up 57%.

  • The best scoring large cap sector is healthcare
  • The top scoring large cap industry is healthcare plans
  • The average score in our large cap universe is 71.39, above the four week moving average score of 70.16. The average large cap stock is trading -10.35% below its 52 week high, 3.26% above its 200 dma, has 3.79 days to cover held short, and is expected to grow its EPS by 10.42% next year.

    The best scoring large cap sector is healthcare. Financials, consumer goods, and services also score strongly. Industrial goods and technology score in line. Utilities and basics score below average.

    The top scoring industry is healthcare plans (ANTM, UNH, HUM, CI, AET). Price adjustments for exchange programs and ongoing Medicaid enrollment growth offer profit growth. Wholesale drugs (MCK, ABC, CAH) benefit from rising demand tied to aging America and insurance reform. Generic price strength offers support. Asset managers (TROW, AMP, PFG, IVZ, BLK) are top scoring as AUM climbs and assets continue to migrate to higher fee equity products. Major food (ADM, MDLZ) revenue growth stems from emerging markets expansion and growth in the convenience store channel. Data storage (WDC, NTAP, STX) stocks are historically strong performers at this time of year.

    In large cap basics, only major chemicals (APD, SHW, ASH) score above average. Falling input costs offer margin support. In consumer goods, focus on major food, textiles (NKE, RL, MHK, LULU), and processed & packaged goods (MKC, MJN, CAG). The top financials groups are asset managers, P&C insurers (CB, CINF, XL, WRB, ACE, HIG), and REITs (HCN, AVB, SLG, PSA, HST, HCP). In healthcare, concentrate on healthcare plans, medical instruments (BDX, XRAY, SYK, BCR), and biotechnology stocks (GILD, ILMN, BIIB, INCY, CELG, REGN, BMRN). The top industrials baskets are aerospace/defense (TDG, RTN, HON, GD, NOC, COL) and industrial equipment (PH, ROP). In services, wholesale drugs, air delivery & freight (UPS, CHRW, FDX), and diversified entertainment (DIS, TWX) score best. Data storage, business software (FISV, WIT, ADP), and semi ICs (TSM, BRCM) are the top industries in technology. Diversified utilities also score high.

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    Author: Travis Esquivel

    Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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