E Mid Cap Best And Worst Report - June 25, 2014

The highest scoring names in mid cap from 1 year ago returned 482 bps more than the S&P 500. The best performers have been ILMN up 134%, UA up 104%, GT up 87%, EGN up 74%, STZ up 70%, and GMCR up 62%.

  • The top scoring mid cap sector is utilities.
  • The best mid cap industry is gas utilities.

The average mid cap score is 60.35, above the four week moving average score of 57.78. The average mid cap stock is trading -11.17% below its 52 week high, 4.92% above its 200 dma, has 7.83 days to cover short, and is expected to grow EPS by 19.7% next year.

The best scoring mid cap sector remains utilities. Basics, healthcare, and financials also score above average. Consumer goods score in line. Technology, services, and industrial goods score below average.

The following chart reflects mid cap sector scores since 2010.

Gas utilities (PNY, EGN, NJR) are the top scoring mid cap industry. Oil & gas equipment & services (HLX, PDS, RES, EXH) demand turns benefits from rising production in shale plays, including post-spring thaw activity in the Bakken. Specialty chemicals (PPO, NEU) benefit from competitive advantages tied to rising natural gas production/input costs. Printed circuit boards (FLEX, JBL) are strong scoring; however, semi related stocks tend to peak alongside industry book-to-bill in the second quarter -- plan accordingly. Processed & packaged goods (GIS, FLO) are high scoring and benefit from M&A, global expansion, and increased penetration in convenience stores.

In mid cap basic materials, focus on oil & gas equipment & services, specialty chemicals, and independent oil & gas (UPL, NFX, ROSE). The best consumer baskets are processed & packaged goods, auto parts (TEN, CLC, FDML), and business equipment (HNI, DBD). In financials, only accident & health insurance (AIZ, CNO) and REITs (HME, TCO, DEI) score above average -- trade up in market cap where possible (see yesterday's report). In healthcare, buy hospitals (LPNT, SEM). In industrial goods, concentrate on industrial electrical equipment (RBC). The best services groups are trucking (ODFL, KNX), rental & leasing (R, AER, UHAL), and auto dealers (PAG). The best technology industries are printed circuits, semi ICs (MSCC, IRF), and scientific & technical instruments (CGNX, FLIR).

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