Methodology

Our weekly best and worst reports show you stocks with the best potential returns over the coming 6 to 12 months.  The score is calculated by fusing together the key drivers of price movement including, earnings beats, earnings growth, at-the-market insider buys, institutional activity, short ratio analysis, price to earnings analysis and calendar quarter seasonality.  Those stocks appearing in our best list should be bought while those appearing in our worst list should be sold.

The highest scoring names in mid cap from 1 year ago (5/29/2013) returned 587 bps more than the S&P 500. The best performers have been ILMN up 124%, TRN up 109%, ALK up 77%, GT up 69%, and GMCR up 54%.


 

• The top scoring mid cap sector is utilities.
• The top mid cap industry is trucking

The average mid cap score is 55.98, above the four week moving average score of 54.6. The average mid cap is trading -13.79% below the 52 week high, 1.59% above the 200 dma, has 6.94 days to cover held short, and is expected to post EPS growth of 19.52% next year.
 
Utilities and consumer goods score above average. Basics, healthcare, and financials score in line. Services, industrials, and technology score below average.
 

Trucking (ODFL, HTLD, KNX) volume continues to grow, offering support for rates. Average freight rates were 15% higher than last year for vans and reefers in April. Flatbed rates gained 9.3% in the past year. Gas utilities (EGN, NJR) are strong scoring on recovering natural gas prices. Specialty chemicals (PPO, NEU) offer upside opportunity thanks to global competitive price advantages tied to shale natural gas production. Oil & gas equipment & services (PDS, RES, EXH) enjoy seasonal tailwinds as rig activity picks up in summer. Processed & packaged goods (GIS, FLO) benefit from consolidation and post- recession pricing and packaging innovations.
 

In mid cap basics, buy specialty chemicals, oil & gas equipment & services, and synthetics (CMP, POL). The top consumer baskets include processed & packaged goods, textiles (COLM, CRI), and business equipment (HNI, DBD). In financials, only REITs (TCO, HME, DEI, KRC, BMR) and accident & health insurance (AIZ) score above average.  In healthcare, buy hospitals (LPNT). In industrial goods, focus on aerospace/defense (ESL, CW, CAE) and diversified machinery (SPW, NDSN, ITT). The best services baskets are trucking, rental & leasing (R, AER, UHAL), and auto dealers (PAG). The top technology groups are printed circuit boards (FLEX, CLS) and business software (ROVI, TIBX, SSNC). Utilities also score highly.