This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

Southern Company is an electric and gas utility and wholesaler with nine million customers and 41,000 megawatts of generating capacity. Its gas subsidiary also provides distribution and wholesale gas services. In 2023, retail electricity accounted for about 65% of total revenue, while natural gas sales accounted for just under 20%. Southern's electrical customer base is evenly balanced, with commercial, industrial, and residential customers each representing about one-third of retail sales. The company is based in Atlanta and provides natural gas to customers in Illinois, Georgia, Virginia, and Tennessee. SO owns regulated electric utilities in Georgia, Alabama, and Mississippi. Its largest utility, Georgia Power, accounted for about 40% of 2023 revenue. The company also offers digital wireless and fiber-optic services. SO's 2023 fuel mix is 52% gas, 17% coal, 17% nuclear, and 14% renewables. It is working to achieve net-zero greenhouse-gas emissions by 2050, later than peers without coal generation. The fuel mix will change once the company adds the last of its new nuclear reactors to its three existing nuclear units at the Vogtle Electric Generating Plant in Georgia. The company has faced rising costs and pandemic delays with these reactors - the first U.S. nuclear units built in the last 30 years. Vogtle 3 became operational in July 2023, and Vogtle 4 became fully operational in April 2024. The company also faced setbacks with its now written-off Kemper County 'clean coal' plant, which resulted in more than $5.0 billion in cost overruns and damaged its reputation. In 2016, Southern Company Gas acquired AGL Resources' gas infrastructure and liquefied natural gas operations. SO shares are a component of the S&P 500. The company's market cap is $94 billion.

Neutral remains the order of the day when it comes to insider-sentiment data from Vickers Stock Research. As has been the case for several weeks now, insiders simply will not commit to a bullish or a bearish stance. The likely biggest current contributor to this is the cyclical impact of earnings season, when corporate executives, directors, and beneficial owners are broadly prohibited from trading. But throw in the election and Fed interest-rate decision this week, and it is not hard to make a case for static trading behavior. How landlocked is insider sentiment? Last week, Vickers' broadest sentiment ratio, the Total Eight-Week Sell/Buy Ratio, clocked in at 4.13. This week, the ratio has moved to 4.11. Of note, those readings exist in a neutral range that starts at 2.50 and goes up to 6.00. So they are almost exactly at the midpoint of the neutral range - and, therefore, about as neutral as a reading can get. On a sector basis, insider buying was particularly notable in Energy over the last week, with nearly $30 million of shares bought versus less than $1 million sold. Buying activity was also of note within Consumer Discretionary, trailing selling activity by a factor of just 1.4-times, as well as in the Healthcare sector. Meanwhile, insider selling was greatest in the Information Technology sector, with shares valued at roughly $108 million sold versus less than $0.5 million bought. Selling by insiders was also evident in the Financial sector, with shares valued at $67 million sold versus less than $4 million bought, as well as in the Industrials sector, with $62 million sold versus roughly $180,000 bought. This week, analysts at Vickers highlighted insider transactions of interest at Sirius XM Holdings Inc. (NGS: SIRI) and Southwest Airlines Co. (NYSE: LUV).

The U.S. presidential election is tomorrow. Last week, in Part 1 of this series, we made a case that the state of the economy is a bigger driver for Wall Street than who wins and takes over the White House. This week, we add some color to the presidential cycle over a typical four-year term and examine how that cycle affects the market. Historical data suggests that Year 1 is a honeymoon year, with a feeling of optimism that usually is good for stocks. In Year 1, the S&P 500 has been up 14% on average for more than 50 years, going back to 1980. Year 2 is still an up year for stocks, but only by about 5% as some of the challenges of the office surface and midterm elections cause distraction and uncertainty. Year 3 has proven to be the strongest, with stocks up about 15%. As sitting presidents put their candidate hat back on, there is increased spending and often tax breaks. Year 4 dips again, with stocks rising a smaller 4% due to uncertainty about the pending election. This week, in Part 2 of our review of the election and sectors, we look at Energy and Healthcare to see how they might perform under either candidate. While our analysis does look at specific policies, it essentially boils down to the broad approach of the candidates.