Some retail investors rationalise their search for outsized returns from higher risk stocks with the observation made by US investor Peter Lynch in his book One Up on Wall Street – “big companies don’t have big stock moves.”
Market commentators that favor small cap stocks frequently cite this quotation from one of the great investors of all time.  Yet readers who have actually read the book know Lynch went beyond the quote and acknowledged that as a big company stocks recovering from a “series of misfortunes” can make big moves.
Large Cap Skeptics have only to compare the performance of the worst performers from the ASX 100 in Fiscal Year 2016 with their performance to date in 2017.  The ASX 100 is a mix of Large Cap stocks – minimum market cap of $4.9 billion – and Mid-Caps – minimum market cap of $1.7 billion.
Conventional wisdom tells us Big Cap stocks have limited growth prospects when compared to Small Cap stocks. That wisdom also tells us dividend-paying Big Caps provide a margin of safety in a diversified stock portfolio.  
The following table looks at the bottom 20 ASX 100 performers for FY 2016, with the percentage decline in shareholder return (dividend payments plus share price appreciation) along with total return to date for 2017.  The comparison is not perfect, as the Fiscal Year ends on 30 June and we are two months beyond at 31 August.  The table also includes two-year growth forecasts for earnings and dividends.

Three of the stocks did not reverse course in 2017, although one could argue that Ansell Limited (ANN) at -0.3% was essentially flat.  Fifteen of the remaining 18 stocks have seen double digit gains so far in 2017.  Investors concerned about Big Cap growth should note 10 stocks are forecasted to achieve double digit earnings growth over the next two years.
With the exception of Primary Health Care (PRY) with negative returns to date coupled with negative forward earnings growth forecast, any of the stocks in the table could be candidates for a list of stocks to watch, depending on investment style.
Arguably the best of the lot are those stocks achieving both double digit total returns to date along with double digit future earnings growth forecasts.  Five Large Cap stocks meet those criteria along with two Mid Cap stocks.
The Mi C-cap that stands out is Iluka Resources (ILU), a global supplier of rare earth minerals derived from mineral sands.  The company claims to be the “major producer” of zircon globally as well as a large producer of rutile and synthetic rutile, derived from high-grade titanium dioxide.
China is the world leader in rare earth minerals and in 2011 their stated intention was to restrict exports of these minerals vital for products ranging from renewables to autos to telecom and batteries. The price skyrocketed and company’s like Iluka were in high investor demand in expectation of a new mining boom.  
The boom turned to bust rapidly but the rise of Electric Vehicles in particular and renewable energy products in general have industry experts predicting a new boom.  In 2016 falling prices led Iluka to close its main zircon mining operation in South Australia to sell down inventory.  The company reported a loss of $0.021 per share, but the reopening of mining operations coupled with rising prices are forecasted to increase earnings per share to $0.295 in FY 2017 and $0.636 by 2018. It should be noted that the rare earths produced by Iluka find their way into tiles and pigments, with only their use in water and air purification systems possibly considered as renewables.
The following price movement chart illustrates the boom/bust cycle for this stock.

Downer EDI Limited (DOW) offers its customers a variety of services through its three operating units – Infrastructure; Mining; and Rail.  These divisions serve customers in transportation, mining, energy, industrial engineering, and utilities. Investors have been rewarded with average annual rates of total shareholder return of 21.6% over five years and 21.1% over the last three years.
After a series of starts and stops including a miserable response to a capital raise to fund the acquisition, Downer has effected a takeover of complementary company Spotless Group Holdings (SPO), a provider of facilities management services to both private & government institutions in Australia and New Zealand. 
In the midst of a dismal 2016 Downer management forecasted profit for the Full Year 2017 at $171 million.  On 29 August, the company announced profit at $181.5 million, along with a 6.4% rise in sales.  To cap it off, management expects the Spotless acquisition to contribute to a 5% profit increase for FY 2018.
Origin Energy (ORG), produces electricity and gas for the retail market.  The company was one of many jumping into the LNG (Liquefied Natural Gas) sector in anticipation of a “golden age of gas.”  Massive cost overruns and production delays at virtually every project coupled with falling oil prices led to substantial write downs, with Origin taking a $3.2 billion dollar hit leading to an FY 2017 loss of $2.2 billion.  
The good news for long term Origin investors was that excluding the write downs the company’s statutory profit rose 51%.  The company’s electricity generating and retailing operations are highly profitable.  Origin has decided to spin off its conventional oil and gas assets into a new public offering, Lattice Energy.  Origin will focus exclusively on electricity and the Asia Pacific LNG project.  Analysts are bullish on Origin, with a consensus rating of OUTPERFORM.
Orica Limited (ORI) primarily serves the mining and infrastructure sectors with blasting equipment and chemicals.  The demise of the mining boom hurt this company badly, swinging from a profit of $604 million in FY 2014 to a $1.2 billion dollar loss in FY 2015.  Although revenue continued to drop in FY 2016, the company did post a profit of $342 million for the year.
Orica and rival Incitec Pivot (IPL) both embarked on cost cutting and productivity improvement strategies following the decline in mining construction projects which appear to have paid off.  Orica’s Half Year 2017 results were mediocre at best, with a slight decrease in revenue and a slight increase in profit.  Management outlook, however, was positive enough to merit a dividend payment increase from $0.205 to $0.235. The following price movement chart compares the performance of the two over the last two years.

Some analysts and market commentators have been warning investors to stay away from the Big Four banks for some time, based on diminishing growth opportunities.  Yet the banks keep producing for their shareholders.  Skeptics claim the low interest environment propping up the banks cannot last forever.  Australia and New Zealand Banking Group (ANZ) has a new strategy of improvement initiatives in place in anticipation of the changing environment.  ANZ has been actively reducing its insurance and retail banking operations throughout Asia.  The company’s prior “super regional strategy” was hemorrhaging capital expenditures without compensatory profit.  In the long term, returning home to focus heavily on the Australian market may prove to be the wrong move.  In the short term, it is already paying off as ANZ’s Half Year 2017 results showed a 6% increase in profit.  
Woolworth’s Limited (WOW), held the title of Australia’s most valuable brand in 2015, falling behind Telstra Limited (TLS) and now Commonwealth Bank of Australia (CBA), ranking fifth in 2017.  With the spectre of Amazon looming over the Australian retail landscape, Woolworth’s has more to worry about than its branding.
In a highly competitive, low margin market, Woolworth’s has been seeking to streamline itself, first exiting the home hardware sector, then the petrol market, with rumours now afoot the company may be planning to exit the liquor business as well.  The arrival of Amazon has been long anticipated, but few expected that company’s latest move in the US – buying brick and mortar grocery chain, Whole Foods.  In reaction here, shares of Australian food retailers dropped.  Within days of the takeover, Amazon began lowering prices at Whole Foods by as much as 43%.
Woolies lacks the resources to engage in a price-war with Amazon, but the invader would first have to acquire brick and mortar retailers.  Skeptics of the doomsday prophecies for Woolworth’s point to the once impending doom from the arrival of US discounter Costco, which never happened.
Lend Lease Group (LLC) is a global developer, builder, and owner of large scale projects in major urban areas, as well as rail and roadway infrastructure projects.  Concerns over our property market are growing, but Lend Lease is aggressively pursuing international expansion, especially in the US. Lend Lease has more than 20 major projects in development there, beginning in 2017 and extending to 2057, with multiple projects already operational.
Lend Lease announced its Full Year 2017 results on 28 August, preceded by an embarrassing accidental leak of some of the results.  Newly completed projects in Australia and New York boosted the company’s net profit by 8.7%, with an 11.4% revenue increase.

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