E Mid Cap Best & Worst Report - April 6, 2016

  • The best mid cap sectors are utilities and technology.
  • The highest scoring mid cap industry is oil & gas equipment & services.

After rolling scores to reflect second quarter seasonality, the average mid cap score is 57.78, which is below the 61.67 four week average score. Historically, the second quarter offers coin-flip seasonality with mid caps being among the poorest performing of the major market ETFs.

The average stock in our mid cap universe is trading -23.65% below its 52 week high, 1.48% above its 200 dma, has 6.26 days to cover held short, and is expected to grow its EPS by 15.9% next year. Utilities, technology, consumer, and healthcare score best. industrials and services score in line. Basics and financials score poorly.

The following stocks score best (and worst) in our mid cap universe.

The next chart shows historical mid cap average scores since the Great Recession.

The following mid caps offer the strongest history of producing gains in the second quarter.

The best mid cap basket is oil & gas equipment & services (RES, PDS). However, energy baskets are hit-and-miss in terms of seasonality and scores remain very stock specific. Since inception, the median Q2 return for the USO is -0.66% (the strongest 3-month period for returns is February through April). Healthcare plans (WCG, MOH, MGLN, CNC), gas utilities (NJR, PNY), industrial electrical (AOS, RBC, BDC), and medical instruments (TFX, HRC, NUVA) can also be bought.

Oil & gas equipment & services, specialty chemicals (NEU), and synthetics (POL) score best in basics. Packaging & containers (TUP, MINI), processed & packaged goods (GIS), and textiles (CRI, COLM) are the top consumer goods industries. Accident & health insurance (AIZ) offers upside in financials. Healthcare plans, medical instruments, and medical appliances (ALGN, SIRO, GMED, MASI) are best in healthcare. Industrial electrical and residential construction (NVR) are top scoring in industrial goods. The strongest scoring services industries are movies (RGC, DWA), business services (HPY, RBA, HMSY, FICO, DLX), and trucking (ODFL). In technology, concentrate on scientific & technical instruments (CGNX, FLIR, COHR, BRKR), technical & system software (CDNS, MENT), and business software (WBMD, ROVI, SSNC). Gas utilities can also be bought.

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