The Best Scoring Stocks To Buy Now

|
Includes: ABT, ADBE, AET, AFFX, AGN, ANAC, ANTM, APH, ASRT, AZO, BCR, BDX, BIG, BJRI, BLL, CAH, CBRL, CCK, CDW, CIEN, CNMD, COLM, CRM, CSL, CSX, CTAS, DIOD, DIS, DISH, DLX, DPS-OLD, DYAX, ELLI, ENDP, EQIX, FLO, FLT, FSL, GLW, HAE, HAS, HBI, HRL, HSP, IGV, IMAX, IRWD, IT, JCOM, KNX, LEA, LEG, LII, LVLT, M, MAR, MCHP, MRVL
by: Todd Campbell
Summary

Healthcare is the highest scoring sector across our universe.

Market seasonality favors midcap stocks through May.

Basic materials remain an under-weight.

Since 2010, the best scoring stocks in our weekly rankings have outpaced the relevant benchmark index by an average 470 bps in the following year, with no turnover.

Across our 1,600 stock universe, healthcare is the best scoring sector. Technology, consumer goods, and services also score above the universe average score. Industrial goods, financials, utilities, and basic materials score below average.

Large cap portfolio managers should concentrate portfolios within the healthcare, industrial goods, and services sectors. Mid cap portfolios should focus on consumer goods, healthcare, and technology. Small cap over-weights should be in technology, utilities, and consumer goods. Note: Our recommendation to buy small cap stocks last October is getting a bit long-in-the-tooth; normalize weights.

The following chart shows sector score by market cap.

The next table provides insight into market seasonality. Over the past decade, mid cap stocks (NYSEARCA:MDY) and the NASDAQ 100 (NASDAQ:QQQ) have the best track record for upside in the 3-months ending May 31st. The MDY has gained in 8 of the past 10 years, returning a median 4.05%. The QQQ is also up in 8 of the past 10 years and its median return for the period is 2.14%. Small cap and the S&P 500 are a coin flip, with both finishing May higher than they begin March in 6 of the past 10 years.

HEALTHCARE

Healthcare stocks (NYSEARCA:XLV) have posted gains in 7 of the past 10 3-month periods ending May 31st. In healthcare, biotech has the lowest correlation to the SPY for the period, but is otherwise mixed. Pharma (NYSEARCA:XPH) has gained in 6 of the past 8 years (75% success rate) during the period, returning a median 4.89% - the best median return of these three.

Pharmacy benefit managers are increasingly embracing strategies to boost prescription drug adherence rates even as demand for prescription drugs is climbing thanks to an aging population and insurance reform. Drug makers will continue to benefit from volume growth. Begin paying close attention to biologics patent expirations and FDA biosimilars decisions as biosimilars will have a significant impact over the next decade.

Best Scoring: Healthcare 2/26/2015 4 Week MA
Company Name Symbol INDUSTRY SCORE SCORE
Mylan MYL DRUGS-GENERIC 110 96.25
NuVasive Inc NUVA MEDICAL INSTRUMENTS & SUPPLIES 110 108.75
Abbott Laboratories ABT DRUG MANUFACTURERS 105 91.25
Allergan AGN DRUG MANUFACTURERS 105 103.75
Mallinckrodt MNK DRUGS-GENERIC 105 103.75
Aetna AET HEALTH CARE PLANS 105 103.75
Haemonetics HAE MEDICAL INSTRUMENTS & SUPPLIES 105 105
Sigma-Aldrich SIAL SPECIALTY CHEMICALS 105 105
Anacor Pharma ANAC BIOTECHNOLOGY 100 98.75
Dyax Corp DYAX BIOTECHNOLOGY 100 95
Hospira HSP DRUG DELIVERY 100 95
Endo Health Solutions ENDP DRUG MANUFACTURERS 100 98.75
Depomed DEPO DRUG MANUFACTURERS 100 97.5
Actavis ACT DRUGS-GENERIC 100 98.75
Anthem ANTM HEALTH CARE PLANS 100 97.5
St. Jude STJ MEDICAL APPLIANCES & EQUIPMENT 100 80
Sirona Dental SIRO MEDICAL APPLIANCES & EQUIPMENT 100 97.5
CONMED CNMD MEDICAL APPLIANCES & EQUIPMENT 100 100
C.R. Bard Inc. BCR MEDICAL INSTRUMENTS & SUPPLIES 100 98.75
Becton Dickinson BDX MEDICAL INSTRUMENTS & SUPPLIES 100 100
Teleflex TFX MEDICAL INSTRUMENTS & SUPPLIES 100 80
Quintiles Q MEDICAL LABORATORIES AND RESEARCH 100 91.25
Ironwood IRWD MEDICAL LABORATORIES AND RESEARCH 100 97.5

TECHNOLOGY

The Tech Select Sector SPDR (NYSEARCA:XLK) has posted upside through May in 7 of the past 10 years (note: 17.7% of the XLK is Apple). The Morgan Stanley Technology ETF (MTK) has gained ground in 6 of the past 10. Software (BATS:IGV) has been a solid performer in spring, gaining 7 times. Semiconductors (NYSEARCA:XSD) have the highest volatility across these technology ETFs and XSD has finished the 3-month period higher in 5 of the past 9 years (55%).

Overall, technology seasonality favors big cap tech and software stocks. Spending on IT in the UK/Ireland is expected to climb 1.4% this year, outpacing the 0.8% growth expected in the U.S. (Gartner). EU quantitative easing policies could remove a significant drag on global IT demand.

Best Scoring: Technology 2/26/2015 4 Week MA
Company Name Symbol INDUSTRY SCORE SCORE
Ellie Mae ELLI APPLICATION SOFTWARE 115 110
Microchip Tech MCHP SEMICONDUCTOR-SPECIALIZED 115 107.5
Level 3 Communications Inc LVLT DIVERSIFIED COMMUNICATION SERVICES 105 103.75
Amphenol Corp APH DIVERSIFIED ELECTRONICS 105 97.5
Equinix, Inc EQIX INTERNET SOFTWARE & SERVICES 105 83.75
Cavium Networks CAVM SEMICONDUCTOR- BROAD LINE 105 102.5
SunEdison SUNE SEMICONDUCTOR- INTEGRATED CIRCUITS 105 87.5
Adobe Systems ADBE APPLICATION SOFTWARE 100 86.25
Splunk SPLK APPLICATION SOFTWARE 100 85
Proofpoint PFPT APPLICATION SOFTWARE 100 98.75
Corning GLW COMMUNICATION EQUIPMENT 100 102.5
Ciena Corp CIEN COMMUNICATION EQUIPMENT 100 87.5
CDW Corp CDW INFORMATION TECHNOLOGY SERVICES 100 92.5
Salesforce.com CRM INTERNET SOFTWARE & SERVICES 100 86.25
Open Text OTEX INTERNET SOFTWARE & SERVICES 100 90
j2 Global Communications JCOM INTERNET SOFTWARE & SERVICES 100 98.75
Affymetrix Inc AFFX SCIENTIFIC & TECHNICAL INSTRUMENTS 100 98.75
Freescale Semi FSL SEMICONDUCTOR- BROAD LINE 100 103.75
M/A-COM Tech Sol. Hldng MTSI SEMICONDUCTOR- BROAD LINE 100 97.5
Diodes Inc DIOD SEMICONDUCTOR- INTEGRATED CIRCUITS 100 92.5
NVIDIA Corp. NVDA SEMICONDUCTOR-SPECIALIZED 100 86.25
Qlogic QLGC SEMICONDUCTOR-SPECIALIZED 100 100

CONSUMER GOODS

Over the next three months, consumer goods are one of the best performing sectors. During the past 10 years, the XLP has posted gains in the period 9 times, returning a median 5.62%. Position portfolios accordingly.

Best Scoring: Consumer 2/26/2015 4 Week MA
Company Name Symbol INDUSTRY SCORE SCORE
Carlisle Cos CSL RUBBER & PLASTICS 105 103.75
Lennox Int'l LII APPLIANCES 100 100
Dr Pepper Snapple Grou DPS-OLD BEVERAGES 100 97.5
WhiteWave Foods WWAV FOOD - MAJOR DIVERSIFIED 100 87.5
Hormel Foods HRL MEAT PRODUCTS 100 86.25
IMAX Corp IMAX PHOTOGRAPHIC EQUIPMENT & SUPPLIES 100 100
Flowers Foods FLO PROCESSED & PACKAGED GOODS 100 86.25
Smith & Wesson Hldg. SWHC SPORTING GOODS 100 88.75
Skechers USA SKX TEXTILES 100 92.5
Wolverine World Wide WWW TEXTILES 100 86.25
Lear Corp LEA AUTO PARTS 95 93.75
Monster Beverages MNST BEVERAGES 95 92.5
Dish Network Corp. DISH ELECTRONIC EQUIPMENT 95 93.75
Leggett & Platt LEG HOME FURNISHING & FIXTURES 95 97.5
Ball Corp BLL PACKAGING & CONTAINERS 95 91.25
Crown Holdings Inc CCK PACKAGING & CONTAINERS 95 77.5
Packaging Corp. of America PKG PACKAGING & CONTAINERS 95 93.75
Hanesbrands Inc HBI TEXTILES 95 87.5
Columbia Sportswear COLM TEXTILES 95 95
Hasbro Inc HAS TOYS & GAMES 95 91.25

SERVICES

Consumer discretionary stocks are also solid seasonal performers in spring. Over the past decade, the XLY has gained 8 times, returning a median 3.14%.

Restaurants are highly represented in our best scoring list. The Nat'l Restaurant Association's Restaurant Performance Index remained in expansion territory in January. The reading of 102.7 continues to reflect operator optimism over foot traffic and same store sales growth. The Expectations component of this index has been above 100 for 27 consecutive months.

Best Scoring: Services 2/26/2015 4 Week MA
Company Name Symbol INDUSTRY SCORE SCORE
AutoZone AZO AUTO PARTS STORES 110 108.75
Cintas Corp CTAS BUSINESS SERVICES 110 108.75
Walt Disney Company DIS ENTERTAINMENT- DIVERSIFIED 110 102.5
Knight Transportation Inc KNX TRUCKING 105 91.25
O'Reilly Auto ORLY AUTO PARTS STORES 100 98.75
FleetCor Tech FLT BUSINESS SERVICES 100 86.25
Visa Inc. V BUSINESS SERVICES 100 98.75
Deluxe Corp DLX BUSINESS SERVICES 100 98.75
Big Lots, Inc. BIG DISCOUNT, VARIETY STORES 100 85
Omnicare OCR DRUG STORES 100 98.75
Cardinal Health CAH DRUGS WHOLESALE 100 98.75
World Wresting Assoc WWE ENTERTAINMENT- DIVERSIFIED 100 83.75
Marriot International Inc MAR LODGING 100 85
Gartner Inc. IT MANAGEMENT SERVICES 100 76.25
CSX Corp CSX RAILROADS 100 96.25
Parexel Int'l PRXL RESEARCH SERVICES 100 85
C B R L Group CBRL RESTAURANTS 100 97.5
Wendy's International Inc WEN RESTAURANTS 100 98.75
BJ's Restaurants BJRI RESTAURANTS 100 98.75
Red Robin Gourmet Burgers Inc RRGB RESTAURANTS 100 98.75

Top Scoring: All Universes

LG CAP

2/26/2015

4 Week MA

MID CAP

2/26/2015

4 Week MA

Symbol

Sector

SCORE

SCORE

Symbol

Sector

SCORE

SCORE

BEST

BEST

HCN

FINANCIALS

115

112.5

EV

FINANCIALS

110

102.5

MCHP

TECHNOLOGY

115

107.5

NUVA

HEALTHCARE

110

108.75

AZO

SERVICES

110

108.75

NVR

INDUSTRIAL GOODS

110

103.75

CTAS

SERVICES

110

108.75

CAVM

TECHNOLOGY

105

102.5

DIS

SERVICES

110

102.5

CSL

CONSUMER GOODS

105

103.75

MYL

HEALTHCARE

110

96.25

FHN

FINANCIALS

105

110

ABT

HEALTHCARE

105

91.25

HAE

HEALTHCARE

105

105

AET

HEALTHCARE

105

103.75

KNX

SERVICES

105

91.25

AGN

HEALTHCARE

105

103.75

MNK

HEALTHCARE

105

103.75

APD

BASIC MATERIALS

105

105

BIG

SERVICES

100

85

APH

TECHNOLOGY

105

97.5

CBL

FINANCIALS

100

102.5

AVB

FINANCIALS

105

102.5

CBRL

SERVICES

100

97.5

BA

INDUSTRIAL GOODS

105

105

CIEN

TECHNOLOGY

100

87.5

EQIX

TECHNOLOGY

105

83.75

DLX

SERVICES

100

98.75

LVLT

TECHNOLOGY

105

103.75

FLO

CONSUMER GOODS

100

86.25

SIAL

HEALTHCARE

105

105

IMAX

CONSUMER GOODS

100

100

SUNE

TECHNOLOGY

105

87.5

JCOM

TECHNOLOGY

100

98.75

ACT

HEALTHCARE

100

98.75

LII

CONSUMER GOODS

100

100

ADBE

TECHNOLOGY

100

86.25

PRXL

SERVICES

100

85

ANTM

HEALTHCARE

100

97.5

SIRO

HEALTHCARE

100

97.5

BCR

HEALTHCARE

100

98.75

SIVB

FINANCIALS

100

96.25

BDX

HEALTHCARE

100

100

SKX

CONSUMER GOODS

100

92.5

CAH

SERVICES

100

98.75

TFX

HEALTHCARE

100

80

CDW

TECHNOLOGY

100

92.5

WEN

SERVICES

100

98.75

CRM

TECHNOLOGY

100

86.25

WWAV

CONSUMER GOODS

100

87.5

CSX

SERVICES

100

96.25

WWW

CONSUMER GOODS

100

86.25

DPS

CONSUMER GOODS

100

97.5

AAN

SERVICES

95

96.25

ENDP

HEALTHCARE

100

98.75

ABCO

SERVICES

95

86.25

FLT

SERVICES

100

86.25

BWLD

SERVICES

95

95

FSL

TECHNOLOGY

100

103.75

CNC

HEALTHCARE

95

97.5

GLW

TECHNOLOGY

100

102.5

COLM

CONSUMER GOODS

95

95

HRL

CONSUMER GOODS

100

86.25

CRL

HEALTHCARE

95

93.75

HSP

HEALTHCARE

100

95

CTSH

TECHNOLOGY

95

93.75

IT

SERVICES

100

76.25

DPZ

SERVICES

95

93.75

MAR

SERVICES

100

85

FTNT

TECHNOLOGY

95

93.75

NVDA

TECHNOLOGY

100

86.25

GEVA

HEALTHCARE

95

91.25

OCR

SERVICES

100

98.75

GMED

HEALTHCARE

95

96.25

ORLY

SERVICES

100

98.75

GPN

SERVICES

95

95

OTEX

TECHNOLOGY

100

90

ICLR

HEALTHCARE

95

93.75

PLL

INDUSTRIAL GOODS

100

98.75

INFA

TECHNOLOGY

95

98.75

PSA

FINANCIALS

100

101.25

JLL

FINANCIALS

95

93.75

Q

HEALTHCARE

100

91.25

LEG

CONSUMER GOODS

95

97.5

SLG

FINANCIALS

100

98.75

MIDD

INDUSTRIAL GOODS

95

93.75

SPLK

TECHNOLOGY

100

85

MMS

SERVICES

95

93.75

STJ

HEALTHCARE

100

80

MWIV

SERVICES

95

93.75

TDG

INDUSTRIAL GOODS

100

97.5

NJR

UTILITIES

95

95

V

SERVICES

100

98.75

NNN

FINANCIALS

95

90

VTR

FINANCIALS

100

100

ODFL

SERVICES

95

81.25

WEC

UTILITIES

100

90

OUTR

SERVICES

95

85

PANW

TECHNOLOGY

95

92.5

REG

FINANCIALS

95

92.5

SAIC

TECHNOLOGY

95

87.5

SCI

SERVICES

95

85

SPIL

TECHNOLOGY

95

96.25

WRI

FINANCIALS

95

85

ZBRA

TECHNOLOGY

95

93.75

SM CAP

2/26/2015

4 Week MA

2/23/2015

4 Week MA

Symbol

Sector

SCORE

SCORE

Symbol

COUNTRY

SCORE

SCORE

BEST

ELLI

TECHNOLOGY

115

110

RYAAY

Ireland

105

88.75

AFFX

TECHNOLOGY

100

98.75

ARMH

United Kingdom

100

98.75

ANAC

HEALTHCARE

100

98.75

ICLR

Ireland

95

87.5

BJRI

SERVICES

100

98.75

LUX

Italy

95

93.75

CNMD

HEALTHCARE

100

100

PSDV

United States

95

72.5

DEPO

HEALTHCARE

100

97.5

WIT

India

95

98.75

DIOD

TECHNOLOGY

100

92.5

ASMI

Netherlands

90

82.5

DYAX

HEALTHCARE

100

95

DEG

Belgium

90

90

ECOL

INDUSTRIAL GOODS

100

78.75

ENL

Netherlands

90

88.75

IRWD

HEALTHCARE

100

97.5

ERIC

Sweden

90

68.75

MATW

INDUSTRIAL GOODS

100

90

HDB

India

90

87.5

MTSI

TECHNOLOGY

100

97.5

NICE

Israel

90

88.75

PFPT

TECHNOLOGY

100

98.75

RDY

India

90

76.25

QLGC

TECHNOLOGY

100

100

RUK

United Kingdom

90

87.5

RRGB

SERVICES

100

98.75

SNN

United Kingdom

90

75

SWHC

CONSUMER GOODS

100

88.75

STM

Italy

90

78.75

WWE

SERVICES

100

83.75

UPMKY

Finland

90

90

ANIP

HEALTHCARE

95

95

AHONY

Netherlands

85

83.75

EBIX

TECHNOLOGY

95

93.75

BCS

United Kingdom

85

71.25

FARO

TECHNOLOGY

95

78.75

CRH

Ireland

85

85

FORM

TECHNOLOGY

95

87.5

DASTY

France

85

66.25

HBIO

HEALTHCARE

95

93.75

GMK

México

85

70

KFRC

SERVICES

95

93.75

INFY

India

85

83.75

NLNK

HEALTHCARE

95

92.5

ING

Netherlands

85

58.75

PACB

HEALTHCARE

95

97.5

NJ

Japan

85

82.5

PENX

BASIC MATERIALS

95

97.5

NTES

China

85

86.25

RTIX

HEALTHCARE

95

82.5

NVO

Denmark

85

63.75

SGMO

HEALTHCARE

95

80

NVS

Switzerland

85

76.25

SILC

TECHNOLOGY

95

93.75

SNE

Japan

85

86.25

BABY

HEALTHCARE

90

95

SPIL

Taiwan

85

86.25

BEAT

HEALTHCARE

90

92.5

TEO

Argentina

85

58.75

CHE

HEALTHCARE

90

70

CORT

HEALTHCARE

90

78.75

DAVE

SERVICES

90

88.75

FLDM

TECHNOLOGY

90

87.5

FSS

CONSUMER GOODS

90

87.5

IART

HEALTHCARE

90

88.75

LGND

HEALTHCARE

90

72.5

UTMD

HEALTHCARE

90

82.5

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.