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Using seasonality to update watch lists is a great way for investors to anticipate trends. Since 2003, my team at E.B. Capital Markets, LLC has been crunching data to identify seasonal trends for professional investors.

The commodity markets have relied on seasonality for decades. But, increasingly, investors are recognizing certain cycles make particular sectors, industries and stocks attractive.

10 large caps have gained in 9 of the past 10 3 month periods ending July, including three utilities.

For example, recognizing utility stocks tend to trade higher ahead of summer peak electricity demand can help investors spot ideas more quickly.

Centerpoint Energy (CNP), P P L Corporation (PPL) and Transcanada Corp (TRP) have returned a median 5.8%, 9.79% and 4.74% during the period, respectively.

Utilities are typically strong performers in the shoulder months between the busy winter season and the peak summer demand season, with the S&P utilities ETF (XLU) posting some of its best months for beating the S&P 500 (SPY) during Q2 and Q3.

Source: Seasonal Investor

Utilities strength is likely tied to investors de-risking ahead of summer doldrums.

As part of this de-risking, investors flock to dividend paying companies with stable revenue streams. As for these three utilities, they pay an average 3.83% dividend yield - far better than the anemic yields currently paid by government bonds.

Similarly, 2 REITs make the cut for best seasonal performers through July.

Both Avalonbay Communities (AVB) and Equity Residential (EQR) offer strong median returns for the period, gaining 5.42% and 4.95%, respectively.

Both operate in the attractive multi-family apartment industry, an industry which has seen significant growth in effective rents thanks to lower vacancy following the housing bust.

According to real estate firm Reis, apartment vacancy dropped to 4.3% in the first quarter of this year, down from 5% the prior year. This helped push effective rents up 0.5%.

Those vacancy rates will likely trough soon with some 100,000 units expected to enter the market this year. But, low funding costs and timid job growth likely remain supports for funds from operations, critical for dividend rates. Currently, Avalonbay and Equity Residential shares dividend yields are 3.2% and 2.8%, respectively.

(click to enlarge)

Only 1 consumer and 1 basic materials stock have robust seasonality.

Also on the list are Mexican Coca Cola maker Fomento (FMX) and oil and gas independent Questar (STR). Fomento has retreated from its April peak above $125 and is heading into the summer beverage season.

Questar pays a 2.8% dividend yield and benefits from peak summer electricity demand for natural gas, which drives volume through its pipeline. Additionally, Questar benefits from low cost supply from its Wexpro subsidiary, which produces natural gas in the Uinta and Green River Basin for Questar's Utah natural gas customers.

Finally, 3 technology stocks round out our large cap seasonality list.

The first is Crown Castle (CCI), which owns and manages cellular towers. Analysts expect earnings to jump 124% in 2014 to $1.14.

Shares have admittedly never been confused with a value play. However, growth investors should like the increasing sequential top line revenue. Over the past four quarters, year-over-year sales growth has been 17%, 21%, 30% and 34%, respectively. As the weather warms up, it's likely we'll see additional equipment installations and repair work as network capital spending heats up.

As for China Mobile (CHL), shares have gained a median 12.04% in the 3 months ending July, the best median performance of all 10 on our best seasonal large cap list.

The company provided cellular service to 726 million customers in Q1, 114 million of which are 3G. Data traffic should continue to provide support for China Mobile as 3G penetration grows. Additionally, shares currently yield 3.6%.

Similarly, Telus (TU) - a Canadian telecom provider - is also benefiting from consumer appetite for data hungry smartphones. The company saw its sales climb 6% and EPS grow 19% in Q4 and shares currently yield 3.4%.

Across the entire group of top seasonal plays, a trend emerges.

Dividend stocks are clearly in vogue by the end of July. This reinforces the defensive nature of the market calendar. And, while some may argue whether this year will be different, seasonality suggests investors use strength to take some risk off the table and rotate into groups with more predictable revenue and earnings.

Symbol

SECTOR

INDUSTRY

Profit-

May-July

May-July

May-July

(of 10)

Average

Median

Std Deviation

AVB

FINANCIALS

REITS

9

7.51%

5.42%

10.39%

CCI

TECHNOLOGY

DIVERSIFIED COMMUNICATION SERVICES

9

13.23%

5.13%

18.26%

CHL

TECHNOLOGY

WIRELESS COMMUNICATIONS

9

12.17%

12.04%

14.93%

CNP

UTILITIES

DIVERSIFIED UTILITIES

9

6.52%

5.80%

8.51%

EQR

FINANCIALS

REITS

9

5.08%

4.95%

8.09%

FMX

CONSUMER GOODS

BEVERAGES

9

9.83%

4.68%

13.07%

PPL

UTILITIES

ELECTRIC UTILITIES

9

9.54%

9.79%

5.76%

STR

BASIC MATERIALS

INDEPENDENT OIL & GAS

9

7.42%

6.62%

9.34%

TRP

UTILITIES

GAS UTILITIES

9

6.87%

4.74%

6.42%

TU

TECHNOLOGY

WIRELESS COMMUNICATIONS

9

7.92%

7.01%

12.71%

Source: The Best Large Caps To Own Through July