Top Large Cap Gainers From Friday and What to Expect Now

 |  Includes: FLR, NUE, PCP, VLO, WY
by: Rash Menaria

The following is a list of top large cap losers from Friday:

Company Name


% Gain

Valero Energy






Nucor Corporation



Precision Castparts



Fluor Corporation



Click to enlarge

Here are some of the specifics about these stocks and what to expect from them going forward:

Valero gained 6.31% on Friday after it agreed to acquire Chevron's (NYSE:CVX) Pembroke refinery in Wales, U.K., and marketing and distribution assets in the UK and Ireland for $730M plus ~ $1B in working capital. Cheveron’s Pembroke refinery is one of the largest and most complex in Europe with low unit operating costs. The acquisition is EPS accretive and will add ~ $0.25-0.30 annually. VLO is currently trading at a significant discount (~20%) to its peers (independent refiners) on P/E and P/CF basis. The stock is expected to outperform in the near to medium term.

Weyerhaeuser gained 6.23% on Friday as investors anticipated increased demand for forest products due to rebuilding efforts after the Japanese earthquake. U.S. companies like WY are likely beneficiaries of increased exports to Asia as well as a likely rise in prices of timber and other forest products. The stock is expected to continue outperforming the broader markets in near to medium term.

Nucor Corporation gained 4.48% on Friday. Nucor is likely to provide its late-quarter update and quantitative guidance this week. Its peer Steel Dynamics (NASDAQ:STLD) indicated significant sequential improvement across all segments when it set Q1 EPS guidance at $0.37-$0.42 later last week. NUE is likely to note a significant sequential improvement in earnings and can guide above consensus given continued increases in spot metal margins. One can buy it for near term upside.

Precision Castparts gained 4.31% on Friday. It end market consists of Aerospace (~54%), Power (~27%) and General, Industrial and Others (~19%). Its Aerospace exposure is ~75% OE which is expected to do better than aftermarkets in rising oil environment. Further, PCP also has favourable exposure to energy markets in non-Aerospace end markets. PCP can outperform other Aerospace stocks in near to medium term in the current "rising oil" environment. However, one should be cautious if oil starts to correct.

FLR Corporation rose 4.16% on Friday. Reduce competition from Asian peers (as their capacities may be used in rebuilding Japanese infrastructure) may help margins of FLR and other U.S. E&C Companies. U.S. E&C companies particularly those in oil and sas sectors started to see some positives in 2H2010 in terms of their backlog bottoming. Most of the investors are now focussing on margin improvement. Reduced competition is likely to be well received by investors.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.