But this year, the tide may turn in the big-caps' favor. One reason may be the steady weakness in the U.S. dollar vs. other major currencies. A lower greenback makes U.S. exports more attractive and can help to fatten the bottom lines of U.S. companies with a significant presence in overseas markets -- i.e., large-cap multinationals.
BIG FISH. With that in mind, we designed this week's screen. We searched our coverage universe for companies with market caps above $10 billion. That turned up a pretty large list. So we set out to winnow out the most attractive big fish.
How? We looked for stocks with S&P's highest investment ranking of 5 STARS, or strong buy. Stocks with that designation are expected by S&P equity analysts to outperform the overall market by a wide margin over the next 6 to 12 months.
And then we applied one final filter. We searched for stocks with S&P's highest Fair Value ranking of 5, meaning that the stock is considered significantly undervalued under S&P's proprietary analytical model.
These are the stocks that emerged:
Capital One Financial
Matushita Electric Industrial
Maxim Integrated Products
Kaye is an analyst for Standard & Poor's Portfolio Advisors