Weekly Report: Alpha Generating Ideas

Top scoring weekly returns:  Buy and Hold 1 Year   The best sector is industrial goods The best scoring sector remains industrial goods heading into Q4 earnings season.  Managers should remain overweight on potential European recovery. Consumer goods, services and healthcare also score above the universe average score.  In healthcare, managers should tilt toward large cap.   Financials, technology, basics, and utilities score below average.  Managers should buy large and small cap financials, rather than mid cap.  Stay industry specific in basics, which offer solid seasonality across energy during the first quarter.       Industrial Goods   One of the most intriguing opportunities for industrial goods companies this year is a return to growth in Europe.  Nascent  signs of strength  (similar to the U.S. in 2009) are developing, including rising productivity, falling labor costs, and a deceleration in credit tightening for enterprises, suggesting headwinds may ease and industrials with EU exposure may benefit given easy comparisons.   Aerospace remains one of the best scoring industrial baskets thanks to rising production at OEMs.  Construction machinery -- think cranes -- could see demand lift this year as construction spending increases.   Construction spending rose 5.9% year-over-year in November and has increased 5% in the first 11 months versus a year ago.  Compared to last year, nonresidential private spending grew more than 20% for lodging, office, and commercial.  Residential housing, which had been dormant for months, is re-exerting as managers increasingly embrace the idea home buyers will adjust to higher rates thanks to job growth.  November private residential construction spending was 16.6% higher than last year.   Consumer Goods   Some of the top scoring stocks across consumer goods include auto parts and textiles.  Auto sales growth is maturing and will likely decelerate in the U.S. this year; however opportunity for growth remains in Europe where registrations have been showing improvement.   Full year 2013 U.S. auto sales will likely total 15.6 million, the best showing since 2007.  Commercial vehicle and passenger vehicle registrations in the EU rose 8.9% and 1.2% YoY in November, respectively.  Low cotton prices and solid retail apparel turnover support textiles stocks through the Q4 EPS reporting season.  "A" index cotton prices per pound fell to 84.65 cents in November, down from 89.35 cents in October and 93.08 cents in June.   Services   Intermodal continues to support rail carloads, offsetting 2013 weakness in coal and grain.  Total intermodal volume improved 4.6% in 2013 from 2012, helping total carloads increase 1.8%.  Petroleum saw carloads increase the most last year thanks to Bakken and Eagle Ford.  Post grain harvest export demand has been rebounding, suggesting rising exports may offer grain carload pricing power for rails.  Coal activity remains weak, however year-over-year declines have decelerated and comparisons are much easier than two years ago.    Apparel stores also score high in services and offer strength through the Q4 EPS reporting season.  Retail sales for clothing stores in the 3-month period ending November were 3.5% higher than the comparable period in 2012. Healthcare   Generics will re-exert in 2014 as the 'breather' in the patent cliff ends and high profile brands lose protection this year and next year.  Specialty drugs continue to drive profit growth across biotech thanks to pricing power and label expansion. Big pharma will continue to embrace partnerships and/or collaboration agreements with emerging biotech and industry pipelines will expand as more readily available financing helps push pre-clinical into trials.  The FDA  approved  27 drugs in 2013, one third of which were orphan.  25 new drug applications are pending for 2014 and the total number of drug studies registered on the  NIH's Clinical Trials  climbed to 158.4k in 2013 from 138.9k in 2012.     Economic Data to Watch this Week:    January 6th January 7th January 8th ISM non-manuf.  54.5 Factory Orders  1.8 ICSC Chain Sales   ADP Consumer Credit     Top Scoring Stocks:    LARGE CAP   12/31/2013 4 Week MA MID CAP   1/2/2014 4 Week MA Symbol Sector SCORE SCORE Symbol Sector SCORE SCORE BEST       BEST       AMP FINANCIALS 110 108.75 HAS CONSUMER GOODS 110 100 AZO SERVICES 110 108.75 OCR SERVICES 110 110 CELG HEALTHCARE 110 101.25 DDS SERVICES 105 103.75 DIS SERVICES 110 107.5 IRF TECHNOLOGY 105 103.75 GLW TECHNOLOGY 110 98.75 KSU SERVICES 105 96.25 MCHP TECHNOLOGY 110 102.5 PVH CONSUMER GOODS 105 91.25 MYL HEALTHCARE 110 100 TSCO SERVICES 105 96.25 SIAL HEALTHCARE 110 110 VRSN TECHNOLOGY 105 107.5 AGN HEALTHCARE 105 95 ACT HEALTHCARE 100 88.75 APH TECHNOLOGY 105 103.75 ALXN HEALTHCARE 100 98.75 BDX HEALTHCARE 105 97.5 ARRS TECHNOLOGY 100 97.5 CHK BASIC MATERIALS 105 100 BWA CONSUMER GOODS 100 98.75 CSX SERVICES 105 103.75 CHD CONSUMER GOODS 100 98.75 ITT INDUSTRIAL GOODS 105 96.25 CHH SERVICES 100 98.75 JPM FINANCIALS 105 93.75 CLB BASIC MATERIALS 100 88.75 OI CONSUMER GOODS 105 105 CMC BASIC MATERIALS 100 97.5 TAP CONSUMER GOODS 105 103.75 CNO FINANCIALS 100 92.5 AON FINANCIALS 100 98.75 COLM CONSUMER GOODS 100 92.5 BA INDUSTRIAL GOODS 100 102.5 CRS BASIC MATERIALS 100 97.5 BCR HEALTHCARE 100 88.75 CSL CONSUMER GOODS 100 97.5 CF BASIC MATERIALS 100 98.75 CVD HEALTHCARE 100 86.25 CLR BASIC MATERIALS 100 96.25 CW INDUSTRIAL GOODS 100 100 CLX CONSUMER GOODS 100 97.5 FDML CONSUMER GOODS 100 80 ESRX SERVICES 100 86.25 HP BASIC MATERIALS 100 100 KORS SERVICES 100 82.5 HRL CONSUMER GOODS 100 92.5 LEA CONSUMER GOODS 100 92.5 ILMN HEALTHCARE 100 100 LO CONSUMER GOODS 100 97.5 JKHY TECHNOLOGY 100 87.5 MCO FINANCIALS 100 98.75  LEN INDUSTRIAL GOODS 100 93.75 MJN CONSUMER GOODS 100 95 MTW INDUSTRIAL GOODS 100 95 MON BASIC MATERIALS 100 97.5 NTES TECHNOLOGY 100 83.75 NUE BASIC MATERIALS 100 98.75 NVR INDUSTRIAL GOODS 100 87.5 NVDA TECHNOLOGY 100 78.75 OTEX TECHNOLOGY 100 100 NWL CONSUMER GOODS 100 100 PII CONSUMER GOODS 100 96.25 PRGO HEALTHCARE 100 88.75 SF FINANCIALS 100 100 RRC BASIC MATERIALS 100 86.25 SKX CONSUMER GOODS 100 81.25 RY FINANCIALS 100 85 TEX INDUSTRIAL GOODS 100 100 TMO CONGLOMERATES 100 91.25 TIVO SERVICES 100 71.25 UPL BASIC MATERIALS 100 82.5 TPX CONSUMER GOODS 100 91.25 V SERVICES 100 91.25 TTC INDUSTRIAL GOODS 100 98.75 WM INDUSTRIAL GOODS 100 91.25 WWW CONSUMER GOODS 100 97.5 WY INDUSTRIAL GOODS 100 93.75         SMALL CAP   1/2/2014 4 Week MA ADRS   12/30/2013 4 Week MA Symbol Sector SCORE SCORE Symbol COUNTRY SCORE SCORE BEST       BEST       CENX BASIC MATERIALS 105 87.5 INFY India 100 92.50 HGR HEALTHCARE 105 86.25 NTES China 100 75.00 MBWM FINANCIALS 105 85 RY Canada 100 85.00 AGYS SERVICES 100 87.5 ARMH United Kingdom 95 93.75 ANAC HEALTHCARE 100 100 BRGYY United Kingdom 95 82.50 ANN SERVICES 100 68.75 GA China 95 82.50 DPZ SERVICES 100 96.25 MPEL Hong Kong 95 82.50 FFIN FINANCIALS 100 97.5 PSDV United States 95 50.00 GBX SERVICES 100 88.75 SIG Bermuda 95 92.50 GCO SERVICES 100 78.75 ASR México 90 87.50 SABA TECHNOLOGY 100 88.75 BIDU China 90 66.25 SNHY INDUSTRIAL GOODS 100 90 GENT Italy 90 70.00 UHAL SERVICES 100 97.5 GSOL Bermuda 90 58.75 WIRE BASIC MATERIALS 100 97.5 JOBS China 90 90.00 WTFC FINANCIALS 100 91.25 NJ Japan 90 77.50 ACIW TECHNOLOGY 95 92.5 NVO Denmark 90 82.50 AFFX TECHNOLOGY 95 86.25 RIO United Kingdom 90 88.75 BCOR TECHNOLOGY 95 95 SAP Germany 90 76.25 BDC INDUSTRIAL GOODS 95 98.75 SI Germany 90 77.50 BLDR SERVICES 95 71.25 ABB Switzerland 85 71.25 BONT SERVICES 95 88.75 GMK México 85 73.75 CBRL SERVICES 95 90 HIMX Taiwan 85 62.50 CCC INDUSTRIAL GOODS 95 95 HMC Japan 85 80.00 CDI SERVICES 95 87.5 JST China 85 87.50 CFNL FINANCIALS 95 83.75 NICE Israel 85 75.00 CHE HEALTHCARE 95 82.5 NTZ Italy 85 51.25 CRZO BASIC MATERIALS 95 93.75 SID Brazil 85 82.50 CWT UTILITIES 95 81.25 SORL China 85 53.75 DXYN CONSUMER GOODS 95 75 SPRD China 85 72.50 FINL SERVICES 95 87.5 VE France 85 41.25 HUBG SERVICES 95 81.25 VLCCF Bermuda 85 48.75 IMAX CONSUMER GOODS 95 75 WF Korea 85 62.50 LCAV HEALTHCARE 95 63.75 AMX México 80 73.75 LFUS INDUSTRIAL GOODS 95 88.75 ANW Greece 80 58.75 MATW INDUSTRIAL GOODS 95 92.5 BP United Kingdom 80 78.75 OPEN TECHNOLOGY 95 95 CAAS China 80 55.00 PLXT TECHNOLOGY 95 82.5 CTRP China 80 67.50 PRCP TECHNOLOGY 95 67.5 ELN Ireland 80 55.00 RRGB SERVICES 95 88.75 HKTV Hong Kong 80 60.00 SILC TECHNOLOGY 95 92.5 JRJC China 80 56.25 SSNC TECHNOLOGY 95 92.5 SKM Korea 80 71.25 TRAK TECHNOLOGY 95 90 TRIB Ireland 80 81.25 ZEUS BASIC MATERIALS 95 85 VIP Russia 80 78.75         WIT India 80 82.50
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