E Best And Worst Small Caps Report - June 23, 2016

  • The strongest small cap sectors are utilities and consumer goods.
  • The best small cap industry is auto parts.

The average small cap score is 52.96 and the average score over the past four weeks is 52.37. The average small cap stock in our universe is trading -31.32% below its 52 week high, 3.05% above its 200 dma, and has 8.14 days to cover held short.

The best small cap sectors are utilities and consumer goods. Industrial goods, basic materials, and technology also score strongly. Financials score in line with the average universe score. Healthcare and services score below average. Only 14.7% and 11.4% of healthcare and services stocks have a score of at least 75 this week, respectively. Be selective.

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The strongest small cap industry is auto parts (SRI, TWI, MTOR, SMP). Credit services (WRLD), computer peripherals (ALOT), diversified electronics (SIMO), and semi equipment (AMBA, UTEK) are also top scoring baskets. 

Steel & iron (ZEUS, AKS, SCHN), gold (SA), and industrial metals (BOOM) can be bought in basic materials. Auto parts, processed & packaged goods (MGPI), and home furnishings (SCSS) are best in consumer goods. Credit services and regional banks (CFNL, TCBK) are top scoring in financials. Home healthcare (AMED, BIOS, AFAM), medical instruments (IART, MMSI, CMN, VASC, LMNX), and specialized health services (BEAT, USPH) are best in healthcare. The strongest industrials groups are aerospace/defense (AVAV, TASR) and general building materials (USLM). Catalogs (FLWS), trucking (MRTN), and resorts/casinos (MCRI) offer upside in services. Retail headwinds typically fade later in Q3 or in early Q4. Stay on the sidelines until then. Computer peripherals, diversified electronics, and semi equipment are high scoring in technology.  

Disclosure: None.

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