The Best And Worst Big Cap Stocks To Buy Now

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Includes: ABT, ADBE, AET, AGN, ANTM, APD, APH, ASH, AVB, AZO, BA, BDX, CAH, CDW, CMCSA, CRM, CTAS, DIS, DPS-OLD, F, FSL, FTI, GGB, GLW, HAS, HRL, HTHIY, JOY, KGC, LVLT, MAR, MCHP, MYL, NRG, NTR, NVDA, NXPI, ORLY, PSA, QSR, SIAL, STJ, SUNEQ, TDG, TSCO, TX, WELL, WSM
by: Todd Campbell

Summary

Healthcare is the top scoring large cap sector.

The best scoring large cap industry is healthcare plans.

Remain underweight energy.

Since 2010, the top scoring stocks in our large cap report each week have outpaced the SPX by a median 312 bps in the following year.

Since 2010

Large Cap

LG CAP

SPX

EXCESS

Average

18.13%

15.16%

2.96%

Median

17.17%

16.05%

3.12%

The average large cap stock score is 67.11, below our four week moving average score of 67.51. The average large cap stock in our universe is trading -11.06% below its 52 week high, 4.73% above its 200 dma, has 3.61 days to cover held short, and is expected to grow its EPS by 13.58% next year.

Healthcare is the top scoring large cap sector. Services, consumer goods, technology, and industrial goods also score above the large cap universe average score. Financials, basic materials and utilities score below average.

The following table highlights the best and worst scoring stocks in our large cap universe.

LG CAP

3/5/2015

4 WEEK MA

Company Name

Symbol

Sector

INDUSTRY

SCORE

SCORE

BEST

Microchip Tech

MCHP

TECHNOLOGY

SEMICONDUCTOR-SPECIALIZED

115

115

AutoZone

AZO

SERVICES

AUTO PARTS STORES

110

110

Cintas Corp

CTAS

SERVICES

BUSINESS SERVICES

110

110

Health Care REIT

HCN

FINANCIALS

REITS

110

112.5

Aetna

AET

HEALTHCARE

HEALTH CARE PLANS

105

105

Allergan

AGN

HEALTHCARE

DRUG MANUFACTURERS

105

105

Walt Disney Company

DIS

SERVICES

ENTERTAINMENT- DIVERSIFIED

105

108.75

Ford Motor

F

CONSUMER GOODS

AUTO MANUFACTURERS- MAJOR

105

87.5

Freescale Semi

FSL

TECHNOLOGY

SEMICONDUCTOR- BROAD LINE

105

103.75

Mylan Labs

MYL

HEALTHCARE

DRUGS-GENERIC

105

102.5

SunEdison

SUNE

TECHNOLOGY

SEMICONDUCTOR- INTEGRATED CIRCUITS

105

95

Abott Laboratories

ABT

HEALTHCARE

DRUG MANUFACTURERS

100

96.25

Adobe Systems

ADBE

TECHNOLOGY

APPLICATION SOFTWARE

100

93.75

Agrium Inc

AGU

BASIC MATERIALS

AGRICULTURAL CHEMICALS

100

95

Anthem

ANTM

HEALTHCARE

HEALTH CARE PLANS

100

98.75

Air Products & Chemicals

APD

BASIC MATERIALS

CHEMICALS- MAJOR DIVERSIFIED

100

103.75

Amphenol Corp

APH

TECHNOLOGY

DIVERSIFIED ELECTRONICS

100

103.75

Ashland Inc

ASH

BASIC MATERIALS

CHEMICALS- MAJOR DIVERSIFIED

100

97.5

Avalonbay Comm.

AVB

FINANCIALS

REITS

100

102.5

Boeing

BA

INDUSTRIAL GOODS

AEROSPACE/DEFENSE PRODUCTS & SERVICES

100

103.75

Becton Dickinson

BDX

HEALTHCARE

MEDICAL INSTRUMENTS & SUPPLIES

100

100

Cardinal Health

CAH

SERVICES

DRUGS WHOLESALE

100

100

CDW Corp

CDW

TECHNOLOGY

INFORMATION TECHNOLOGY SERVICES

100

100

Comcast

CMCSA

SERVICES

CATV SYSTEMS

100

92.5

Salesforce.com

CRM

TECHNOLOGY

INTERNET SOFTWARE & SERVICES

100

93.75

Dr Pepper Snapple Grou

DPS-OLD

CONSUMER GOODS

BEVERAGES

100

98.75

Corning

GLW

TECHNOLOGY

COMMUNICATION EQUIPMENT

100

102.5

Hasbro Inc

HAS

CONSUMER GOODS

TOYS & GAMES

100

98.75

Hormel Foods

HRL

CONSUMER GOODS

MEAT PRODUCTS

100

93.75

Level 3 Communications Inc

LVLT

TECHNOLOGY

DIVERSIFIED COMMUNICATION SERVICES

100

103.75

Marriot International Inc

MAR

SERVICES

LODGING

100

92.5

NVIDIA Corp.

NVDA

TECHNOLOGY

SEMICONDUCTOR-SPECIALIZED

100

93.75

NXP Semiconductors

NXPI

TECHNOLOGY

SEMICONDUCTOR- BROAD LINE

100

98.75

O'Reilly Auto

ORLY

SERVICES

AUTO PARTS STORES

100

100

Public Storage

PSA

FINANCIALS

REITS

100

101.25

Restaurant Brands Int'l

QSR

SERVICES

RESTAURANTS

100

81.25

Sigma Aldrich

SIAL

HEALTHCARE

SPECIALTY CHEMICALS

100

103.75

St. Jude

STJ

HEALTHCARE

MEDICAL APPLIANCES & EQUIPMENT

100

86.25

Transdigm Group Inc.

TDG

INDUSTRIAL GOODS

AEROSPACE/DEFENSE PRODUCTS & SERVICES

100

98.75

Tractor Supply Co.

TSCO

SERVICES

SPECIALTY RETAIL, OTHER

100

97.5

Williams Sonoma

WSM

SERVICES

HOME FURNISHING & FIXTURES

100

95

WORST

Hitachi Ltd.

OTCPK:HTHIY

INDUSTRIAL GOODS

FARM & CONSTRUCTION MACHINERY

10

11.25

Nrg Energy Inc

NRG

UTILITIES

ELECTRIC UTILITIES

10

12.5

F M C Tech.

FTI

BASIC MATERIALS

OIL & GAS EQUIPMENT & SERVICES

20

23.75

Gerdau SA

GGB

BASIC MATERIALS

STEEL & IRON

20

21.25

Joy Global Inc

JOY

INDUSTRIAL GOODS

FARM & CONSTRUCTION MACHINERY

20

22.5

Kinross Gold

KGC

BASIC MATERIALS

GOLD

20

17.5

Ternium Sa ADR

TX

BASIC MATERIALS

STEEL & IRON

20

21.25

Learn more about our scoring methodology: E.B. Capital Markets, LLC

The next chart shows historical large cap scores by sector.

The best large cap industry is healthcare plans (AET, ANTM, CI, HUM, UNH). Strong enrollment growth in the exchanges offers significant premium tailwinds. Medicaid has enrolled 10.8 million people since expansion in 2013, significantly boosting revenue for private Medicaid insurers. Wholesale drugs (CAH, MCK, ABC) and drug stores (OCR, CVS, WBA) similarly benefit from rising healthcare utilization tied to expansion. Aging baby boomers are also boosting prescription volume. Semi ICs (SUNE, TSM, SWKS, BRCM, MRVL) offer upside thanks to the electrification of industrials, Internet of Things, and consolidation opportunities. Aerospace/defense (TDG, BA, RTN, NOC, LMT, HON, COL, BEAV) scores are trending up ahead of the summer air show order season.

In large cap basic materials, only ag chemicals (AGU, CF, MOS, DD) and major chemicals (ASH, APD, SHW) score above average. Falling input costs offer margin opportunities. In consumer goods, focus on cigarettes (RAI, MO, LO), auto parts (LEA, BWA, MGA), and textiles (HBI, VFC, NKE, LULU). European vehicle demand supports parts sales. EU passenger car and commercial vehicle registrations were up 6.7% and 7.6%, respectively, in January versus a year ago.

Only REITs (HCN, PSA, AVB, VTR, SLG, SPG) score above average in financials this week. Every healthcare industry scores above average. Concentrate on healthcare plans, medical appliances (STJ, ZMH, EW), and biotechnology stocks (MDVN, BIIB, INCY, ILMN, REGN, JAZZ, CELG). Aerospace/defense is the only industrial goods basket to score above average. In services, buy wholesale drugs, drug stores, department stores (KSS, TJX, M), and grocers (KR, WFM). Semi ICs, broadline semiconductor (FSL, NXPI, TXN, ADI, MXIM), and business software (DOX, FISV, WIT, JKHY) are the top technology group

LG CAP INDUSTRY SCORE BY SECTOR

3/5/2015

Sector

Industry

SCORE

BASIC MATERIALS

AGRICULTURAL CHEMICALS

86.00

BASIC MATERIALS

CHEMICALS- MAJOR DIVERSIFIED

79.17

BASIC MATERIALS

OIL & GAS REFINING & MARKETING

63.33

BASIC MATERIALS

OIL & GAS PIPELINES

57.50

BASIC MATERIALS

OIL & GAS DRILLING & EXPLORATION

49.44

BASIC MATERIALS

INDEPENDENT OIL & GAS

47.94

BASIC MATERIALS

OIL & GAS EQUIPMENT & SERVICES

46.82

BASIC MATERIALS

INDUSTRIAL METALS & MINERALS

42.50

BASIC MATERIALS

MAJOR INTEGRATED OIL AND GAS

42.50

BASIC MATERIALS

STEEL & IRON

40.00

BASIC MATERIALS

GOLD

38.33

CONSUMER GOODS

CIGARETTES

77.50

CONSUMER GOODS

AUTO PARTS

75.00

CONSUMER GOODS

TEXTILES

75.00

CONSUMER GOODS

PROCESSED & PACKAGED GOODS

68.75

CONSUMER GOODS

AUTO MANUFACTURERS- MAJOR

63.33

CONSUMER GOODS

BEVERAGES

63.33

CONSUMER GOODS

PERSONAL PRODUCTS

63.00

CONSUMER GOODS

FOOD - MAJOR DIVERSIFIED

62.50

FINANCIALS

REITS

79.29

FINANCIALS

ASSET MANAGEMENT

63.75

FINANCIALS

INSURANCE BROKERS

63.75

FINANCIALS

MONEY CENTER BANKS

62.22

FINANCIALS

PROPERTY & CASUALITY INSURANCE

60.31

FINANCIALS

INVESTMENT BROKERAGE

60.00

FINANCIALS

LIFE INSURANCE

54.17

FINANCIALS

CREDIT SERVICES

53.75

FINANCIALS

FOREIGN MONEY CENTER BANKS

51.00

FINANCIALS

REGIONAL BANKS

49.00

FINANCIALS

SAVINGS & LOANS

45.00

HEALTHCARE

HEALTH CARE PLANS

93.00

HEALTHCARE

MEDICAL APPLIANCES & EQUIPMENT

80.63

HEALTHCARE

BIOTECHNOLOGY

77.50

HEALTHCARE

MEDICAL INSTRUMENTS & SUPPLIES

75.00

HEALTHCARE

DRUG MANUFACTURERS

72.50

INDUSTRIAL GOODS

AEROSPACE/DEFENSE PRODUCTS & SERVICES

88.50

INDUSTRIAL GOODS

DIVERSIFIED MACHINERY

67.14

INDUSTRIAL GOODS

INDUSTRIAL EQUIPMENT & COMPONENTS

56.25

INDUSTRIAL GOODS

FARM & CONSTRUCTION MACHINERY

50.00

SERVICES

DRUGS WHOLESALE

90.00

SERVICES

DRUG STORES

87.50

SERVICES

DEPARTMENT STORES

81.67

SERVICES

GROCERY STORES

80.00

SERVICES

LODGING

80.00

SERVICES

RESTAURANTS

80.00

SERVICES

BUSINESS SERVICES

78.64

SERVICES

APPAREL STORES

75.71

SERVICES

DISCOUNT, VARIETY STORES

70.00

SERVICES

RAILROADS

68.00

SERVICES

ENTERTAINMENT- DIVERSIFIED

60.00

SERVICES

CATV SYSTEMS

58.57

SERVICES

AIR DELIVERY & FREIGHT SERVICES

57.50

SERVICES

RESORTS AND CASINOS

43.33

TECHNOLOGY

SEMICONDUCTOR- INTEGRATED CIRCUITS

92.00

TECHNOLOGY

SEMICONDUCTOR- BROAD LINE

85.00

TECHNOLOGY

BUSINESS SOFTWARE & SERVICES

81.00

TECHNOLOGY

COMMUNICATION EQUIPMENT

75.83

TECHNOLOGY

SEMICONDUCTOR-SPECIALIZED

74.29

TECHNOLOGY

TECHINICAL & SYSTEM SOFTWARE

69.17

TECHNOLOGY

SEMICONDUCTOR EQUIPMENT & MATERIALS

69.00

TECHNOLOGY

SCIENTIFIC & TECHNICAL INSTRUMENTS

68.75

TECHNOLOGY

INTERNET SOFTWARE & SERVICES

68.18

TECHNOLOGY

APPLICATION SOFTWARE

68.00

TECHNOLOGY

DIVERSIFIED COMMUNICATION SERVICES

66.67

TECHNOLOGY

DATA STORAGE DEVICES

61.25

TECHNOLOGY

INTERNET INFORMATION PROVIDER

57.14

TECHNOLOGY

WIRELESS COMMUNICATIONS

49.38

TECHNOLOGY

DIVERSIFIED COMPUTER SYSTEMS

48.33

TECHNOLOGY

TELECOM SERVICES - DOMESTIC

46.67

UTILITIES

FOREIGN UTILITIES

51.67

UTILITIES

DIVERSIFIED UTILITIES

51.11

UTILITIES

ELECTRIC UTILITIES

47.14

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.

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