Large Cap Report: Best Lead By Utilities Sector

By Todd Campbell
Sunday, April 20, 2014 4:11 PM EDT

Methodology

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 returned an average 17.87% in the past year.  Performance has been led MGA up 70%, NOC up 68%, HAL up 47%, BA up 43%, and ORLY up 42%.

  • The top large cap sector is utilities.
  • Industrial metals & minerals is the top industry.

The average large cap score is 54.69 this week, below the four week moving average score of 57.87. The average large cap is trading -12.27% below its 52 week high, 0.90% above its 200 dma, has 4.1 days to cover short, and is expected to post EPS growth of 14.01% next year.
 
The best large cap sector is utilities, which offer robust seasonality ahead of summer. Basic materials have strengthened thanks to improving scores for oil & gas. Industrial goods also score above average and benefit from recovery in Europe. Consumer, healthcare, and technology score in line. Services and financials score below average.
 

LG CAP       4/17/2014 4 Week MA
Company Name Symbol Sector INDUSTRY SCORE SCORE
BEST          
Eqt Corp EQT UTILITIES GAS UTILITIES 105 95
Kellogg Company K CONSUMER GOODS PROCESSED & PACKAGED GOODS 105 91.25
Amphenol Corp APH TECHNOLOGY DIVERSIFIED ELECTRONICS 100 97.5
Burger King BKW SERVICES RESTAURANTS 100 96.25
EnCana Corp ECA BASIC MATERIALS INDEPENDENT OIL & GAS 100 95
Edison Intl EIX UTILITIES ELECTRIC UTILITIES 100 90
Edwards Lifesciences EW HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 100 91.25
Goodyear Tire GT CONSUMER GOODS RUBBER & PLASTICS 100 80
Merck MRK HEALTHCARE DRUG MANUFACTURERS 100 88.75
Nextera Energy NEE UTILITIES ELECTRIC UTILITIES 100 92.5
Pentair PNR INDUSTRIAL GOODS INDUSTRIAL EQUIPMENT & COMPONENTS 100 88.75
Wisconsin Energy WEC UTILITIES DIVERSIFIED UTILITIES 100 90
Avalonbay Comm. AVB FINANCIALS REITS 95 87.5
Core Lab CLB BASIC MATERIALS OIL & GAS EQUIPMENT & SERVICES 95 91.25
DaVita Inc DVA HEALTHCARE SPECIALIZED HEALTH SERVICES 95 87.5
Eastman Chemical Co EMN BASIC MATERIALS CHEMICALS- MAJOR DIVERSIFIED 95 88.75
E O G Resources EOG BASIC MATERIALS INDEPENDENT OIL & GAS 95 85
Entergy Corp New ETR UTILITIES ELECTRIC UTILITIES 95 78.75
General Dynamics GD INDUSTRIAL GOODS AEROSPACE/DEFENSE  PRODUCTS & SERVICES 95 91.25
Halliburton HAL BASIC MATERIALS OIL & GAS EQUIPMENT & SERVICES 95 88.75
Idexx Lab IDXX HEALTHCARE DIAGNOSTIC SUBSTANCES 95 87.5
Illumina ILMN HEALTHCARE BIOTECHNOLOGY 95 90
Eli Lilly LLY HEALTHCARE DRUG MANUFACTURERS 95 81.25
Microchip Tech MCHP TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 95 96.25
O'Reilly Auto ORLY SERVICES AUTO PARTS STORES 95 90
Reynolds American RAI CONSUMER GOODS CIGARETTES 95 87.5
Scana Corp New SCG UTILITIES DIVERSIFIED UTILITIES 95 86.25
Tyson Foods TSN CONSUMER GOODS MEAT PRODUCTS 95 92.5
Under Armor UA CONSUMER GOODS TEXTILES 95 82.5
Weatherfold International Inc WFT BASIC MATERIALS OIL & GAS EQUIPMENT & SERVICES 95 88.75
Xcel Energy Inc XEL UTILITIES ELECTRIC UTILITIES 95 87.5
Autozone AZO SERVICES AUTO PARTS STORES 90 88.75
Brown Forman Corp BF.B CONSUMER GOODS BEVERAGES 90 83.75
Cameco CCJ BASIC MATERIALS INDUSTRIAL METALS & MINERALS 90 78.75
Continental Resources CLR BASIC MATERIALS OIL & GAS DRILLING & EXPLORATION 90 88.75
Camden Ppty CPT FINANCIALS REITS 90 83.75
C V S Corp CVS SERVICES DRUG STORES 90 87.5
Quest Diagnostic DGX HEALTHCARE MEDICAL LABORATORIES AND RESEARCH 90 63.75
Walt Disney Company DIS SERVICES ENTERTAINMENT- DIVERSIFIED 90 88.75
Dover Corp DOV INDUSTRIAL GOODS DIVERSIFIED MACHINERY 90 82.5
The Directv Group Inc DTV TECHNOLOGY COMMUNICATION EQUIPMENT 90 83.75
Green Mtn. Coffee Roasters GMCR CONSUMER GOODS PROCESSED & PACKAGED GOODS 90 83.75
Intel INTC TECHNOLOGY SEMICONDUCTOR- BROAD LINE 90 76.25
L3 Communications LLL SERVICES SECURITY & PROTECTION SERVICES 90 86.25
Lorillard Inc LO CONSUMER GOODS CIGARETTES 90 88.75
Mdu Res Group Inc MDU INDUSTRIAL GOODS GENERAL BUILDING MATERIALS 90 87.5
Public Service Ent. PEG UTILITIES DIVERSIFIED UTILITIES 90 85
P P L Corp PPL UTILITIES ELECTRIC UTILITIES 90 82.5
Quanta Svcs Inc PWR INDUSTRIAL GOODS GENERAL CONTRACTORS 90 82.5
Range Resources Corp RRC BASIC MATERIALS INDEPENDENT OIL & GAS 90 76.25
S L Green SLG FINANCIALS REITS 90 87.5
Constellation Brands STZ CONSUMER GOODS BEVERAGES 90 78.75
Transdigm Group Inc. TDG INDUSTRIAL GOODS AEROSPACE/DEFENSE  PRODUCTS & SERVICES 90 90
           
WORST          
Alcatel ALU TECHNOLOGY COMMUNICATION EQUIPMENT 15 23.75
A S M L Holding ASML TECHNOLOGY   15 32.5
Bed Bath & Beyond BBBY SERVICES HOME FURNISHING & FIXTURES 15 22.5
Fireeye Inc FEYE TECHNOLOGY APPLICATION SOFTWARE 15 31.25
Incyte Corp INCY HEALTHCARE BIOTECHNOLOGY 15 26.25
Leucadia Nat'l LUK CONGLOMERATES CONGLOMERATES 15 32.5
Mattel Inc MAT CONSUMER GOODS TOYS & GAMES 15 27.5
Nomura Holdings NMR FINANCIALS INVESTMENT BROKERAGE 15 21.25
Sei Investments Co SEIC FINANCIALS INVESTMENT BROKERAGE 15 30

 

 

Industrial metals & minerals (CCJ, CNX) is the top scoring large cap industry.  Electric (NEE, EIX, XEL, ETR, PPL, DTE) and diversified utilities (WEC, SCG, PEG) score high ahead of summer peak demand. Cold weather supported spot market electricity prices in the first quarter. The EIA expects electricity production will climb 1.8% this year. Drug stores (CVS, RAD, WAG) benefit as patent expirations support margin. Higher script volume tied to reform driven insurance enrollment offers upside. Oil & gas pipelines (SE, WMB) round out the best scoring industries as revenue grows thanks to new lines and rising volume.
 



 

 
Basics are led by industrial metals & minerals, oil & gas pipelines, independent oil & gas (ECA, EOG, RRC, APC, SWN), and oil & gas equipment & services (WFT, HAL, CLB, BHI, SLB). In consumer goods, buy cigarettes (RAI, LO), processed & packaged goods (K, GMCR, CPB), and auto parts (MGA, ALV, BWA). The top financials groups include REITs (AVB, SLG, CPT, EQR), credit services (SLM, AXP, ADS), and foreign money center banks (BSAC, IBN). In healthcare, concentrate on healthcare plans (HUM, WLP), drugmakers (MRK, LLY, JNJ, AGN), and medical appliances (EW, ISRG, RMD). Every industrial goods basket scores above average, led by aerospace/defense (GD, TDG, RTN). Summer air show season offers upside catalysts as orders support vendors. Across services, buy drug stores, rails (UNP, CSX, KSU), and grocers (KR). Total rail carload volume is up 2.7% year-to-date from 2013. The biggest year over-year growth this year is coming from grains, which is up 15.4% from last year.

Consumer discretionary gets progressively weaker as weather warms. In technology, focus on diversified computer (TDC, IBM), telecom (CTL, T), semi ICs (TSM, MRVL) and specialized semi (MCHP, LSI). The SEMI book-to-bill historically peaks for the year in the second quarter. Electric, diversified, and foreign utilities (ENI, CIG) all score above average.

 

LG CAP INDUSTRY SCORE BY SECTOR   4/17/2014
Sector Industry SCORE
     
BASIC MATERIALS INDUSTRIAL METALS & MINERALS 85.00
BASIC MATERIALS OIL & GAS PIPELINES 75.00
BASIC MATERIALS INDEPENDENT OIL & GAS 69.12
BASIC MATERIALS OIL & GAS EQUIPMENT & SERVICES 61.82
BASIC MATERIALS CHEMICALS- MAJOR DIVERSIFIED 60.83
BASIC MATERIALS OIL & GAS DRILLING & EXPLORATION 57.22
BASIC MATERIALS MAJOR INTEGRATED OIL AND GAS 53.75
BASIC MATERIALS OIL & GAS REFINING & MARKETING 53.33
BASIC MATERIALS AGRICULTURAL CHEMICALS 48.00
BASIC MATERIALS GOLD 45.83
BASIC MATERIALS STEEL & IRON 44.29
CONSUMER GOODS CIGARETTES 67.50
CONSUMER GOODS PROCESSED & PACKAGED GOODS 65.00
CONSUMER GOODS AUTO PARTS 64.17
CONSUMER GOODS BEVERAGES 60.56
CONSUMER GOODS FOOD - MAJOR DIVERSIFIED 60.00
CONSUMER GOODS TEXTILES 55.56
CONSUMER GOODS PERSONAL PRODUCTS 45.00
CONSUMER GOODS AUTO MANUFACTURERS- MAJOR 41.67
FINANCIALS REITS 63.33
FINANCIALS CREDIT SERVICES 55.63
FINANCIALS FOREIGN MONEY CENTER BANKS 50.00
FINANCIALS MONEY CENTER BANKS 50.00
FINANCIALS PROPERTY & CASUALITY INSURANCE 50.00
FINANCIALS LIFE INSURANCE 46.67
FINANCIALS REGIONAL BANKS 46.50
FINANCIALS INSURANCE BROKERS 42.50
FINANCIALS SAVINGS & LOANS 42.50
FINANCIALS ASSET MANAGEMENT 34.38
FINANCIALS INVESTMENT BROKERAGE 31.25
HEALTHCARE HEALTH CARE PLANS 58.00
HEALTHCARE DRUG MANUFACTURERS 57.83
HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 53.75
HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 48.89
HEALTHCARE BIOTECHNOLOGY 45.42
INDUSTRIAL GOODS AEROSPACE/DEFENSE  PRODUCTS & SERVICES 64.50
INDUSTRIAL GOODS INDUSTRIAL EQUIPMENT & COMPONENTS 61.25
INDUSTRIAL GOODS FARM & CONSTRUCTION MACHINERY 58.00
INDUSTRIAL GOODS DIVERSIFIED MACHINERY 55.71
SERVICES DRUG STORES 75.00
SERVICES RAILROADS 61.00
SERVICES GROCERY STORES 60.00
SERVICES RESTAURANTS 58.00
SERVICES ENTERTAINMENT- DIVERSIFIED 55.00
SERVICES LODGING 55.00
SERVICES CATV SYSTEMS 51.43
SERVICES DEPARTMENT STORES 50.00
SERVICES BUSINESS SERVICES 48.50
SERVICES RESORTS AND CASINOS 46.67
SERVICES DISCOUNT, VARIETY STORES 45.83
SERVICES AIR DELIVERY & FREIGHT SERVICES 45.00
SERVICES DRUGS WHOLESALE 45.00
SERVICES APPAREL STORES 41.43
TECHNOLOGY DIVERSIFIED COMPUTER SYSTEMS 68.33
TECHNOLOGY TELECOM SERVICES - DOMESTIC 66.67
TECHNOLOGY SEMICONDUCTOR- INTEGRATED CIRCUITS 66.25
TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 66.25
TECHNOLOGY DATA STORAGE DEVICES 62.50
TECHNOLOGY SEMICONDUCTOR- BROAD LINE 58.75
TECHNOLOGY DIVERSIFIED COMMUNICATION SERVICES 58.33
TECHNOLOGY BUSINESS SOFTWARE & SERVICES 58.00
TECHNOLOGY COMMUNICATION EQUIPMENT 56.67
TECHNOLOGY INTERNET INFORMATION PROVIDER 56.67
TECHNOLOGY SEMICONDUCTOR EQUIPMENT & MATERIALS 55.00
TECHNOLOGY SCIENTIFIC & TECHNICAL INSTRUMENTS 53.75
TECHNOLOGY TECHINICAL & SYSTEM SOFTWARE 50.00
TECHNOLOGY APPLICATION SOFTWARE 46.00
TECHNOLOGY INTERNET SOFTWARE & SERVICES 45.00
TECHNOLOGY WIRELESS COMMUNICATIONS 35.63
UTILITIES ELECTRIC UTILITIES 79.29
UTILITIES DIVERSIFIED UTILITIES 76.00
UTILITIES FOREIGN UTILITIES 63.33

 

None.

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