After rolling scores to reflect the shift to Q2 seasonality, the average large cap score is 60.46, which is below the four week average score of 62.87. The drop in score isn’t surprising given seasonal headwinds typically increase heading into summer. Over the past decade, the S&P 500 offers coin-flip seasonality, gaining ground six times and delivering a median 0.11% median return. Yawn.Returns for the NASDAQ 100 have been better (up a median 2.51% in the period), but it’s also delivered upside in just 6 of the past 10 years.
Source: SS
The average large cap stock in our universe is trading -19.2% below its 52 week high, 2.69% above its 200 dma, has 4.34 days to cover held short, and is expected to grow its EPS by 14.27% in the next year. Utilities, technology, industrials, healthcare, and consumer goods score above average. Services score in line. Financials and basics score below average.
The following are the top and bottom scoring stocks in our large cap universe.
The following stocks offer the best track record for seasonal upside in the second quarter.
The strongest scoring large cap industry is scientific & technical instruments (WAT, MTD, A). Domestic telecom (T, CTL, VZ), insurance brokers (MMC, AJG), cigarettes (PM, MO, RAI), and major chemicals (EMN, APD, ASH, SHW) also score high.
In large cap basics, only major chemicals and gold (NEM, GOLD) score above the universe average score. Cigarettes, processed & packaged goods (CPB, K, SJM, MKC), and personal products (EL, KMB) are best in consumer goods. The top financials industries are insurance brokers, REITs (DLR, AVB, VTR, PSA, HCN, SPG), and P&C insurers (CB, PGR, RE, TRV). Healthcare plans (AET, HUM, UNH), medical instruments (BCR, SYK, BSX, BDX), and medical appliances (EW, ISRG) can be bought in healthcare. Industrial equipment (PH) and diversified machinery (IR, ITW) score highest in industrials. Air delivery & freight (CHRW, FDX, UPS), discount stores (DG, DLTR, WMT), and restaurants (YUM, MCD, DRI) offer upside in services. Scientific & technical instruments, domestic telecom, and diversified communication (AMT) are strongest in technology. Diversified (NI, SCG, WEC, EXC) and electric utilities (NEE, DTE, ETR, EIX) can also be owned.
