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 best scoring small caps from one year ago have outperformed the R2K by 682 bps over the past year, with no turnover.  The top performers have been RAD up 298%, MTRX up 105%, ISSC up 79%, MIDD up 76%, TYL up 74%, and PZZA up 72%.
 

 

• The best scoring small cap sector is industrial goods.
• The top scoring small cap industry is railroads.

The average small cap score is 58.54 this week, above the four week moving average score of 56.52.  The average small cap is trading -20% below its 52 week high, 7.33% above its 200 dma, and has 6.5 days to cover short.
 
The best small cap sector is industrial goods, followed by healthcare, and financials.  Utilities and services score in line. Technology, basics, and consumer goods score below average.
 

The best small cap industry is railroads (GBX, ARII). Carload volume is supporting pricing, driving investment in new railcars. Growing global R&D spend supports scientific & technical instrument (FLDM, ALOG, PRCP) demand. Managers should include more medical appliances (CYBX, BABY, CUTR) stocks in portfolios given tax fears may be over-modeled. Business services (EXAM, CGX, ARC) and general building materials (HW) round out our top scoring industry ranking this week.

No small cap basics groups score above average; tilt up in market cap where possible. In consumer, only textiles (DXYN, PERY) outpace the universe average. Buy regional banks (TBBK, MBWM, LKFN), investment brokers (CLMS), and P&C insurers (GLRE) in financials. The top healthcare buckets are medical appliances, drug related products (NUTR, AUXL), and medical instruments (HTWR, VASC, IART).  In industrials, focus on general building materials and aerospace/defense (ORB). The best services groups are railroads, business services, and restaurants (DAVE, RRGB, CEC). In technology, concentrate weights in scientific & technical instruments, business software (EBIX, NTCT, MSTR), and semi ICs (TQNT, DIOD, PLXT).