E Mid Cap Best And Worst Report - July 9, 2014

The highest scoring names in mid cap from 1 year ago returned 314 bps more than the S&P 500. The best performers have been UA up 95%, STZ up 78%, ACT up 76%, CW up 75%, and GMCR up 73%.

  • Financials score best across mid cap.
  • The top scoring mid cap industry is gas utilities.

The average mid cap score is 63.79, above the four week moving average score of 60.99. The average mid cap stock is trading -10.98% below its 52 week high, 5% above its 200 dma, has 7.82 days to cover held short, and is expected to deliver 19.4% EPS growth in the coming year.

Financials are the top scoring mid cap sector. Basics, healthcare, and technology also score above average. Consumer goods score in line. Utilities, services, and industrial goods score below average.

Gas utilities (PNY, EGN) score best across mid cap. Semi ICs (MSCC, IRF) and semi equipment (TER, SPIL) score highly; however, semi's tend to track along predictable seasonal patterns and the SEMI book-to-bill historically peaks in the second quarter. Synthetics (MTX, POL) also score strongly. REITs (WRI, NNN, REG, HME, DEI, DDR, CBL, ARE) offer upside too. Apartment occupancy improved from 4.3% last year to 4.1% in Q2 as new supply helped absorb demand. New completions this year are slated to be the highest since 1999. Apartment effective rent rose 0.8% quarter-over-quarter in Q2.

In basics, buy synthetics, drillers (PTEN, ATW), and oil & gas equipment & services (HLX). In consumer, auto parts, business equipment (HNI), and textiles (DECK, SKX) are best. In May, industrial production of textiles and apparel and leather grew 1.7% and 3.7% from last year, respectively. Clothing & clothing accessory store sales continue to trend higher.

The top financials baskets include REITs, asset managers (AB, EV), and regional banks (PMT, OZRK, ASBC, NPBC). No mid cap healthcare groups score above average. In industrial goods, focus on industrial electrical equipment (BDC). In services, buy business services (RBA, HCSG, FICO, PRAA), movies (RGC, LGF), and auto dealers (PAG). The best scoring technology industries are semi ICs, semi equipment, and printed circuit boards (JBL, FLEX).

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