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The Top Large-Cap Stocks To Buy Now

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Includes: ABBV, ABC, AEM, AMAT, AMP, APH, AZO, BBT, BC, BNS, C, CELG, CGNX, CHRW, CHU, CI, CIG, CINF, COO, CSL, CTAS, D, DOV, EMN, EMR, ENTG, ETN, ETR, EV, FAST, FHN, FITB, FLIR, GRMN, HMC, HUM, IR, ITW, JBHT, JEC, JPM, K, KLAC, KNX, LEN, LRCX, MCHP, MDT, MU, NNN, O, OSK, PEAK, PH, PNR, S, SHW, SO, SRPT, STI, SYK, T, TER, TM, UNH, USB, WHR, ZTS
by: Limelight Alpha Management Partners
Limelight Alpha Management Partners
Long/short equity, Growth, medium-term horizon, registered investment advisor
Summary

The best ranked large-cap sector is industrial goods.

The top-scoring industry is trucking.

The highest scoring stocks include AbbVie, Teradyne, and C.H. Robinson Worldwide.

In a bid to spark inflation by boosting loan activity and business investment, the Federal Reserve lowered its target rate this week by an additional 25 basis points to a range of 1.50% to 1.75%. The lowered rates could make this a good time to buy stocks, but stock picking is more important than ever given ongoing trade uncertainty and slower global growth. Read on to discover the best sectors, industries, and stocks to buy now.

A ranking of large cap sectors

Weekly, we aggregate our ranking of over 1,600 stocks by sector to gain insight into market leadership. Our scoring methodology is explained in more depth here, but as a refresher, scores are based on forward earnings growth, historical trends in reporting earnings that beat Wall Street estimates, insider buying, short term and long-term institutional money flow, forward valuation relative to historical valuation, contra-trend short interest analysis, and quarterly seasonality over the past decade.

This week, our sector ranking continues to favor traditionally dividend-oriented baskets. Industrial goods (Illinois Tool Works Inc. (ITW), Eaton Corporation (ETN), Parker-Hannifin Corp (PH)), REITs (HCP, Inc (HCP), Realty Income Corp (O), National Retail Properties (NNN), and financials ( SunTrust Banks (STI), U.S. Bancorp (USB), JPMorgan Chase (JPM) are the top-ranked large cap sectors.

Meanwhile, consumer goods and services score neutral and healthcare, technology, utilities, and basic materials are rated below average. In these groups, our industry or stock specific scores could be your best bet for market-beating returns (see further below).

A ranking of large cap sectors from strongest to weakest.

Source: Limelight Alpha.

The best and worst scoring stocks

The next table shows the highest and lowest scoring large-cap stocks in our universe. Because stocks historically follow earnings over time, insiders only buy for one reason; money flow reflects institutional optimism or pessimism, and seasonal patterns often rhyme, these individual stocks have characteristics that are likely to be rewarded or punished from here.

LG CAP 10/31/2019 4 Week MA
Company Name Symbol Sector INDUSTRY SCORE SCORE
BEST
AbbVie Inc. (ABBV) HEALTHCARE DRUG MANUFACTURERS 110 88.75
Teradyne (TER) TECHNOLOGY SEMICONDUCTOR EQUIPMENT & MATERIALS 110 107.5
Celgene (CELG) HEALTHCARE BIOTECHNOLOGY 105 103.75
C H Robinson Worldwide (CHRW) SERVICES AIR DELIVERY & FREIGHT SERVICES 105 85
Carlisle Co's (CSL) CONSUMER GOODS RUBBER & PLASTICS 105 85
Eaton Corp (ETN) INDUSTRIAL GOODS INDUSTRIAL ELECTRICAL EQUIPMENT 105 81.25
H C P Inc. (HCP) REITS REITS 105 108.75
Illinois Tool Works (ITW) INDUSTRIAL GOODS DIVERSIFIED MACHINERY 105 91.25
Hunt J B (JBHT) SERVICES TRUCKING 105 102.5
Jacobs Engineering (JEC) SERVICES TECHNICAL SERVICES 105 103.75
Microchip Tech (MCHP) TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 105 102.5
Suntrust Bks Inc (STI) FINANCIALS MONEY CENTER BANKS 105 101.25
Whirlpool (WHR) CONSUMER GOODS APPLIANCES 105 102.5
Amerisource Bergen (ABC) SERVICES DRUGS WHOLESALE 100 78.75
Ameriprise Finl Inc (AMP) FINANCIALS ASSET MANAGEMENT 100 80
Amphenol Corp (APH) TECHNOLOGY DIVERSIFIED ELECTRONICS 100 87.5
Autozone (AZO) SERVICES AUTO PARTS STORES 100 80
The Bank of Nova Scotia (BNS) FINANCIALS MONEY CENTER BANKS 100 92.5
Cincinnati Finl Corp (CINF) FINANCIALS PROPERTY & CASUALITY INSURANCE 100 101.25
Cintas Corp (CTAS) SERVICES BUSINESS SERVICES 100 98.75
Entegris (ENTG) TECHNOLOGY SEMICONDUCTOR EQUIPMENT & MATERIALS 100 98.75
Eaton Vance (EV) FINANCIALS ASSET MANAGEMENT 100 86.25
Fastenal Corp (FAST) INDUSTRIAL GOODS GENERAL BUILDING MATERIALS 100 96.25
Honda Motor (HMC) CONSUMER GOODS AUTO MANUFACTURERS- MAJOR 100 80
Ingersoll Rand (IR) INDUSTRIAL GOODS DIVERSIFIED MACHINERY 100 78.75
J P Morgan (JPM) FINANCIALS MONEY CENTER BANKS 100 86.25
Kellogg Company (K) CONSUMER GOODS PROCESSED & PACKAGED GOODS 100 97.5
Knight Transportation Inc (KNX) SERVICES TRUCKING 100 98.75
Lennar Corp (LEN) INDUSTRIAL GOODS RESIDENTIAL CONSTRUCTION 100 105
Medtronic (MDT) HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 100 97.5
Micron Tech (MU) TECHNOLOGY SEMICONDUCTOR- MEMORY CHIPS 100 96.25
Oshkosh Truck (OSK) CONSUMER GOODS TRUCKS & OTHER VEHICLES 100 73.75
Parker Hannifin (PH) INDUSTRIAL GOODS INDUSTRIAL EQUIPMENT & COMPONENTS 100 86.25
Southern Company (SO) UTILITIES ELECTRIC UTILITIES 100 98.75
Stryker Corp (SYK) HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 100 91.25
US Bancorp (USB) FINANCIALS REGIONAL BANKS 100 85
WORST
China Unicom (CHU) TECHNOLOGY WIRELESS COMMUNICATIONS 15 25
Companhia Energetica de Minas Gerais (CIG) UTILITIES FOREIGN UTILITIES 15 15
Cooper Companies (COO) HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 15 13.75
Sprint Nextel (S) TECHNOLOGY WIRELESS COMMUNICATIONS 15 21.25
Sarepta Thera (SRPT) HEALTHCARE BIOTECHNOLOGY 15 18.75

The best and worst industries

The best large cap industries this week are trucking (J.B. Hunt Transport Services (JBHT)), wholesale drugs (AmerisourceBergen (ABC)), trucks (Oshkosh Corp. (OSK)), general building materials (Fastenal Company (FAST)), and auto parts stores (AutoZone (AZO)).

A ranking of the top and bottom scoring industries.

Source: Limelight Alpha.

Taking this analysis further, we can determine the best and worst industries for investment ideas by sector.

  • The best basics baskets are major chemicals (The Sherwin-Williams Company (SHW), Eastman Chemical (EMN)) and gold (Agnico Eagle Mines (AEM).
  • Concentrate on trucks, appliances (Whirlpool (WHR)), and major autos (Honda Motor (HMC), Toyota Motor (TM)) in consumer goods.
  • Focus on money center banks (SunTrust Banks (STI), JP Morgan Chase (JPM), The Bank of Nova Scotia (BNS)), regional banks (US Bancorp (USB), Fifth Third Bancorp (FITB), First Horizon National (FHN), Citigroup (C), B B & T Corp (BBT)), and asset managers (Eaton Vance (EV), Ameriprise Financial (AMP), T. Rowe Price (NASDAQ:TROW)) in financials.
  • Healthcare plans (UnitedHealth Group (UNH), Humana (HUM), Cigna (CI)) and generic drugs (Zoetis (ZTS)) are top rated in healthcare.
  • The best industrial goods groups are general building materials, industrial equipment & components (Parker-Hannifin Corp. (PH), Pentair (PNR), Emerson Electric (EMR)), and diversified machinery (Illinois Tool Works (ITW), Ingersoll-Rand (IR), Dover Corp. (DOV), Brunswick Corp. (BC)).
  • In services, the strongest scoring industries include trucking, wholesale drugs, and auto parts stores.
  • Semi equipment (Teradyne (TER), Entegris (ENTG), KLA Corp. (KLAC), Lam Research (LRCX), Applied Materials (AMAT)), scientific & technical instruments (Garmin (GRMN), Cognex (CGNX), FLIR Systems (FLIR)), and domestic telecom (AT&T Inc. (T) are top rated in technology.
  • Electric utilities (The Southern Company (SO), Entergy Corp. (ETR), Dominion Energy (D) can also be bought.

A ranking of industries by sector.

Source: Limelight Alpha.

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Disclosure: I am/we are long CELG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.