The highest scoring names in large cap from 1 year ago (3/5/2013) returned 440 bps more than the S&P 500.  The best performers are PCLN up 88%, GILD up 84%, MYL up 81%, CMG up 72%, YHOO up 68%, BA up 67%, and ITT up 66%.

Methodology

Our weekly best and worst reports show you stocks with the best potential returns over the coming 6 to 12 months.  The score is calculated by fusing together the key drivers of price movement including, earnings beats, earnings growth, at-the-market insider buys, institutional activity, short ratio analysis, price to earnings analysis and calendar quarter seasonality.  Those stocks appearing in our best list should be bought while those appearing in our worst list should be sold.

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• The best large cap sector is industrial goods
• The best large cap industry is lodging.

The average large cap score is 67.25, below the four week moving average score of 68.63.  The average large cap is trading -9.07% below its 52 week high, 6.19% above its 200 dma, has 3.37 days to cover held short, and is expected to grow EPS by 13.58% next year.
 
Industrial goods and healthcare score above average.  Services, consumer goods and basics score in line with the large cap universe average score. Technology, financials, and utilities score below average.
 

 Commentary:

The following chart displays average large cap weekly scores by sector since 2010.


 

The next table provides insight into seasonal trends. The Nasdaq 100 and S&P 400 have better seasonality than the S&P 500 through May.

This next table shows the best seasonal performers for the three months through May. Each has finished May higher than they begin March in all 10 of the past 10 years.

The best large cap industry is lodging (WYN, MAR, HOT, H). Rising business travel and improving consumer confidence/spending is supporting room rates and occupancy, boosting RevPAR.  Look for RevPAR to continue higher this year and for new supply to boost top line results across the industry in 2014. A re-exerting patent cliff offers profit upside at drug stores (RAD, CVS, WAG, OCR) as generic utilization climbs. Reform driven insurance enrollment supports script demand and front-end foot traffic. Look for a broader menu of healthcare services to continue to boost sales.  Ag chemicals (CF, DD, AGU) offers opportunity as farmers who were absent from nitrogen markets last year due to plowing under crops the prior season return.  The seasonal peak for SEMI book-to-bill occurs in the second quarter; maintain semi overweight through early Q2.
 

In large cap basics, buy ag chemicals, major chemicals (EMN, SHW, FMC, APD), and independent oil & gas (XEC, SWN, RRC, ECA, DVN). In consumer, focus on cigarettes (LO,.RAI) and auto parts (LEA, BWA). Across financials, buy REITs (PSA, O, ESS, UDR, SLG), credit services (MCO, DFS, EFX, AXP), and money center banks (PNC, WFC). Consumer loans, credit cards, and other revolving debt at all commercial banks grew an annualized 1.4% in Q4, and has increased in four of the past five quarters.

Every healthcare industry scores above average. Buy medical appliances (STJ, ISRG, ZMH, MDT), healthcare plans (AET, UNH, HUM), and biotechnology (ILMN, MDVN, BIIB, GILD , SGEN). In industrial goods, focus on aerospace/defense (GD, BEAV, TDG, RTN, NOC, LMT), and diversified machinery (FLS, XYL, IR).  The top services baskets include lodging, drug stores, department stores (M), and rails (UNP, NSC). Across technology, concentrate on specialized semi (MCHP, XLNX, NVDA, SCTY), semi ICs (SWKS, BRCM), and scientific & technical instruments (WAT).