E.B. Capital Markets' Large Cap Report

By Todd Campbell
Tuesday, December 24, 2013 2:47 PM EDT

Our weekly best and worst reports show you stocks with the best potential returns over the coming 6 to 12 months.  The score is calculated by fusing together the key drivers of price movement including, earnings beats, earnings growth, at-the-market insider buys, institutional activity, short ratio analysis, price to earnings analysis and calendar quarter seasonality.  Those stocks appearing in our best list should be bought while those appearing in our worst list should be sold.

The highest scoring names in large cap from 1 year ago (12/26/2012) returned 788 bps more than the S&P 500.  The best performers have been YHOO up 105%, LNKD up 90%, ITT up 89%, CREE up 78%, and PXD up 76%.

Important: Scores have rolled to reflect Q1 seasonality.

  • Industrial goods are top scoring
  • The best large cap industry is lodging.

The average large cap score is 71.44, above the four week moving average score of 71.16.  The average large cap is trading 6.09% above its 200 dma, has 4.12 days to cover short and is expected to see EPS growth of 12.7% next year.
 


 

LG CAP       12/24/2013 4 Week MA
Company Name Symbol Sector Industry SCORE SCORE
BEST          
Ameriprise Finl Inc AMP FINANCIALS ASSET MANAGEMENT 110 108.75
Autozone AZO SERVICES AUTO PARTS STORES 110 107.5
Celgene CELG HEALTHCARE BIOTECHNOLOGY 110 96.25
Chesapeake Energy CHK BASIC MATERIALS INDEPENDENT OIL & GAS 110 97.5
Walt Disney Company DIS SERVICES ENTERTAINMENT- DIVERSIFIED 110 107.5
Corning GLW TECHNOLOGY COMMUNICATION EQUIPMENT 110 93.75
J P Morgan JPM FINANCIALS MONEY CENTER BANKS 110 90
Microchip Tech MCHP TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 110 101.25
Mylan Labs MYL HEALTHCARE DRUGS-GENERIC 110 96.25
Sigma Aldrich SIAL HEALTHCARE SPECIALTY CHEMICALS 110 102.5
Allergan AGN HEALTHCARE DRUG MANUFACTURERS 105 87.5
Amphenol Corp APH TECHNOLOGY DIVERSIFIED ELECTRONICS 105 103.75
Boeing BA INDUSTRIAL GOODS AEROSPACE/DEFENSE  PRODUCTS & SERVICES 105 103.75
Becton Dickinson BDX HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 105 96.25
Continental Resources CLR BASIC MATERIALS OIL & GAS DRILLING & EXPLORATION 105 97.5
CSX Corp CSX SERVICES RAILROADS 105 103.75
I T T Corp ITT INDUSTRIAL GOODS DIVERSIFIED MACHINERY 105 91.25
Mead Johnson Nutrition MJN CONSUMER GOODS PROCESSED & PACKAGED GOODS 105 90
Owens Illinois OI CONSUMER GOODS PACKAGING & CONTAINERS 105 105
Adolph Coors Co TAP CONSUMER GOODS BEVERAGES 105 96.25
Ultra Petroleum Corp. UPL BASIC MATERIALS INDEPENDENT OIL & GAS 105 73.75
Apple Computer AAPL TECHNOLOGY PERSONAL COMPUTERS 100 98.75
Aon Corp AON FINANCIALS INSURANCE BROKERS 100 98.75
Activision Blizzard In ATVI TECHNOLOGY MULTIMEDIA & GRAPHICS SOFTWARE 100 78.75
C F Industries Hldngs CF BASIC MATERIALS AGRICULTURAL CHEMICALS 100 98.75
Dollar General DG SERVICES DISCOUNT, VARIETY STORES 100 91.25
Express Scripts ESRX SERVICES MANAGEMENT SERVICES 100 80
Hyatt Hotels H SERVICES LODGING 100 97.5
Lincoln Nat'l LNC FINANCIALS LIFE INSURANCE 100 97.5
Lorillard Inc LO CONSUMER GOODS CIGARETTES 100 96.25
Moody's Corp MCO FINANCIALS CREDIT SERVICES 100 98.75
Monsanto Co MON BASIC MATERIALS AGRICULTURAL CHEMICALS 100 97.5
Nucor Corp NUE BASIC MATERIALS STEEL & IRON 100 97.5
Newell Rubbermaid NWL CONSUMER GOODS HOUSEWARES & ACCESSORIES 100 100
Range Resources Corp RRC BASIC MATERIALS INDEPENDENT OIL & GAS 100 78.75
Royal Bank of Canada RY FINANCIALS MONEY CENTER BANKS 100 83.75
St. Jude STJ HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 100 87.5
Thermo Electron Corp. TMO CONGLOMERATES CONGLOMERATES 100 86.25
Visa Inc. V SERVICES BUSINESS SERVICES 100 87.5
Waste Management WM INDUSTRIAL GOODS WASTE MANAGEMENT 100 90
Weyerhaeuser Co. WY INDUSTRIAL GOODS LUMBER, WOOD PRODUCTION 100 87.5
           
WORST          
Anglogold AU BASIC MATERIALS GOLD 20 33.75
Nissan Motors NSANY CONSUMER GOODS AUTO MANUFACTURERS- MAJOR 20 42.5
Quest Diagnostic DGX HEALTHCARE MEDICAL LABORATORIES AND RESEARCH 25 52.5
Glaxosmithkline GSK HEALTHCARE DRUG MANUFACTURERS 25 37.5
HDFC Bank Ltd HDB FINANCIALS FOREIGN REGIONAL BANKS 25 38.75
Kinross Gold KGC BASIC MATERIALS GOLD 25 38.75
Newmont Mining NEM BASIC MATERIALS GOLD 25 33.75
Nrg Energy Inc NRG UTILITIES ELECTRIC UTILITIES 25 33.75
Silver Wheaton SLW BASIC MATERIALS SILVER 25 27.5

 



 

Commentary:
 





 

The best scoring industry across large cap is lodging (H, MAR, HOT).  Improving occupancy continues to support daily room rates, pushing RevPAR higher.  Committed rooms and rates for 2014 are up 8.4% and 3.5%, respectively.  Occupancy and RevPAR were up 2.1% and 4.7% from a year ago in November, respectively.  Drug stores (CVS, WAG) offer upside as cold weather flu season drives foot traffic.  A rebound in generic launches supports pharmacy margin in 2014 and 2015.  Aerospace/defense (BA, RTN, NOC, LMT, HON) benefits from rising overseas export sales, which partially off-sets budget risk.  Rising AUM tied to market appreciation and rotation into higher fee products support asset managers (AMP, TROW, BEN, PFG, BLK).  Diversified machinery (ITT, FLS, IR) offers upside as the U.S. economy improves and Europe shows early signs of recovery.

In large cap basics, the best industries are ag chemicals (MON, CF, DD), independent oil & gas (CHK, UPL, RRC) and refiners (VLO).  In consumer, only major food (MDLZ, ADM) and cigarettes (LO, MO) score above average.  The top financial baskets include asset managers, life insurance (LNC, PRU, MFC) and money centers (RY, WFC, BNS).  Biotech (CELG, BIIB, GILD) is the top healthcare industry.  Healthcare plans (CI, WLP) and medical instruments (BDX, BCR, BSX) also score strongly.  Every industrials group is above average, led by aerospace/defense, diversified machinery and industrial equipment (ROP, PH).  In services, lodging, drug stores, rails (CSX, NSC), and drug wholesale (CAH, MCK) are best.  The top technology industries are business software (DOX, CTSH), communications equipment (GLW, HRS, DTV) and technical and system software (INFY).  Semi equipment (AMAT, KLAC) also scores high in line with seasonal improvement in the book-to-bill ratio.  As expected, book-to-bill improved to 1.11 in November.  Bookings are up 10% year-over-year over the past three months.
 

LG CAP INDUSTRY SCORE BY SECTOR   12/24/2013
Sector Industry SCORE
     
BASIC MATERIALS AGRICULTURAL CHEMICALS 83.00
BASIC MATERIALS INDEPENDENT OIL & GAS 75.88
BASIC MATERIALS OIL & GAS REFINING & MARKETING 75.00
BASIC MATERIALS STEEL & IRON 72.22
BASIC MATERIALS CHEMICALS- MAJOR DIVERSIFIED 70.00
BASIC MATERIALS MAJOR INTEGRATED OIL AND GAS 70.00
BASIC MATERIALS OIL & GAS DRILLING & EXPLORATION 67.14
BASIC MATERIALS OIL & GAS EQUIPMENT & SERVICES 63.75
BASIC MATERIALS INDUSTRIAL METALS & MINERALS 60.00
BASIC MATERIALS OIL & GAS PIPELINES 60.00
BASIC MATERIALS GOLD 28.57
CONSUMER GOODS FOOD - MAJOR DIVERSIFIED 87.50
CONSUMER GOODS CIGARETTES 80.00
CONSUMER GOODS BEVERAGES 70.71
CONSUMER GOODS PERSONAL PRODUCTS 70.00
CONSUMER GOODS PROCESSED & PACKAGED GOODS 68.57
CONSUMER GOODS AUTO PARTS 66.67
CONSUMER GOODS TEXTILES 65.00
CONSUMER GOODS AUTO MANUFACTURERS- MAJOR 54.17
FINANCIALS ASSET MANAGEMENT 90.00
FINANCIALS LIFE INSURANCE 85.83
FINANCIALS MONEY CENTER BANKS 83.89
FINANCIALS CREDIT SERVICES 83.00
FINANCIALS PROPERTY & CASUALITY INSURANCE 71.82
FINANCIALS INSURANCE BROKERS 70.00
FINANCIALS INVESTMENT BROKERAGE 70.00
FINANCIALS REGIONAL BANKS 67.22
FINANCIALS SAVINGS & LOANS 66.67
FINANCIALS REITS 63.46
FINANCIALS FOREIGN MONEY CENTER BANKS 57.00
HEALTHCARE BIOTECHNOLOGY 83.00
HEALTHCARE HEALTH CARE PLANS 82.00
HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 82.00
HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 72.86
HEALTHCARE DRUG MANUFACTURERS 63.33
INDUSTRIAL GOODS AEROSPACE/DEFENSE  PRODUCTS & SERVICES 92.14
INDUSTRIAL GOODS DIVERSIFIED MACHINERY 89.17
INDUSTRIAL GOODS INDUSTRIAL EQUIPMENT & COMPONENTS 88.33
INDUSTRIAL GOODS FARM & CONSTRUCTION MACHINERY 77.50
SERVICES LODGING 96.67
SERVICES DRUG STORES 92.50
SERVICES RAILROADS 86.25
SERVICES DRUGS WHOLESALE 83.33
SERVICES BUSINESS SERVICES 82.50
SERVICES ENTERTAINMENT- DIVERSIFIED 82.50
SERVICES CATV SYSTEMS 78.75
SERVICES RESTAURANTS 77.50
SERVICES RESORTS AND CASINOS 76.67
SERVICES DEPARTMENT STORES 73.00
SERVICES DISCOUNT, VARIETY STORES 72.50
SERVICES APPAREL STORES 64.17
SERVICES GROCERY STORES 61.67
SERVICES AIR DELIVERY & FREIGHT SERVICES 61.25
TECHNOLOGY BUSINESS SOFTWARE & SERVICES 83.00
TECHNOLOGY COMMUNICATION EQUIPMENT 80.71
TECHNOLOGY TECHINICAL & SYSTEM SOFTWARE 78.33
TECHNOLOGY SEMICONDUCTOR EQUIPMENT & MATERIALS 73.33
TECHNOLOGY INTERNET INFORMATION PROVIDER 73.00
TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 72.50
TECHNOLOGY SCIENTIFIC & TECHNICAL INSTRUMENTS 71.67
TECHNOLOGY APPLICATION SOFTWARE 70.00
TECHNOLOGY DATA STORAGE DEVICES 70.00
TECHNOLOGY SEMICONDUCTOR- BROAD LINE 68.00
TECHNOLOGY INTERNET SOFTWARE & SERVICES 66.67
TECHNOLOGY SEMICONDUCTOR- INTEGRATED CIRCUITS 66.67
TECHNOLOGY DIVERSIFIED COMPUTER SYSTEMS 61.67
TECHNOLOGY WIRELESS COMMUNICATIONS 55.00
TECHNOLOGY TELECOM SERVICES - DOMESTIC 53.75
TECHNOLOGY DIVERSIFIED COMMUNICATION SERVICES 48.33
UTILITIES ELECTRIC UTILITIES 58.57
UTILITIES DIVERSIFIED UTILITIES 50.00
UTILITIES FOREIGN UTILITIES 30.00

None.

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