Small Cap Best & Worst Report - June 12, 2014

The highest scoring names in small cap from 1 year ago (6/13/2013) returned 440 bps more than the Russell 2000. The best performers have been CRZO up 130%, QCOR up 99%, NTRI up 79%, FSS up 70%, UHAL up 70%, MPWR up 70%, and CGNX up 67%.

Score

Russell

Excess

>90

2000

 

24.49%

20.09%

4.40%

  • Utilities are the top scoring small cap sector.
  • Trucking is the top small cap industry.

The average small cap score is 50.11 this week, above the four week moving average score of 46.80. The average small cap stock is trading -23.8% below its 52 week high, -0.52% below its 200 dma, and has 8.37 days to cover held short (down from 8.9 days at the end of May).

The top scoring small cap sector is utilities, followed by industrial goods and consumer goods. Services and financials score in line with the average universe score. Healthcare, technology and basic materials score below average (trade up in market cap where possible in these baskets).

SMALL CAP

 

 

 

 

 

 

# Stocks

Average

Median

% 75 and above

% 25 and below

UTILITIES

4

60.0

55

25.00%

0.00%

INDUSTRIAL GOODS

32

55.2

50

18.75%

0.00%

CONSUMER GOODS

38

53.2

50

23.68%

7.89%

SERVICES

94

50.9

45

15.96%

8.51%

FINANCIALS

38

50.0

47.5

10.53%

10.53%

HEALTHCARE

176

49.1

45

10.80%

15.34%

TECHNOLOGY

108

48.9

45

12.96%

13.89%

BASIC MATERIALS

38

48.4

45

13.16%

15.79%


 

The number of stocks across our entire all-cap universe that are trading more than 5% above their 200 dma (the top of our EBCM band) continues to climb, reaching 670 this week.

The following chart shows historical small cap scores since 2010.

SMALL CAP

6/12/2014

INDUSTRY

SCORE

BEST

 

TRUCKING

78.33

PROPERTY & CASUALITY INSURANCE

71.00

AUTO PARTS

70.00

RESTAURANTS

70.00

RAILROADS

66.67

WORST

 

CREDIT SERVICES

36.25

GOLD

34.00

BROADCASTING

33.00

COMPUTER PERIPHERALS

31.67

Trucking (SAIA, MRTN) is the best small cap industry. The industry benefits from rising tonnage and tight driver capacity driven pricing power. The DOT freight index is neared an all-time high in April and the potential for a suspension to hours of service restarts may benefit operators (if enacted). April's freight shipments were up 4.8% year-over-year. P&C insurer (HMN, STFC, MIG) rates rose 3% in May, according to MarketScout, and related insurers are typically strong performers through storm season. Auto parts (MTOR, SMP, SRI) sales demand is likely to head higher thanks to rebounding activity in Europe. Through the first four months of this year, personal and commercial vehicle registrations are 7.4% and 8.7% higher than last year, respectively. According to the Nat'l Restaurant Association's Restaurant Performance Index, restaurant operators (RRGB, DAVE, BJRI) are benefiting from improving foot-traffic and same store sales. The index rose for a second consecutive month in April, reaching its best levels since last May. Railroad (GBX) activity continues to support related companies. Intermodal rail carloads have now shown year-over-year improvement in 54 consecutive months, rising 8% in May. Total U.S. traffic (including intermodal) is 4.3% higher year-to-date than 2013.

In small cap basics, only independent oil & gas (GDP, PVA, PQ, CRK) score above average. In consumer, buy auto parts and processed & packaged goods (BDBD). P&C insurers and regional banks (MBWM, SNBC) score above average in financials. Only medical instruments (LMNX, HTWR, ATRI) score above average in healthcare. The best industrial basket is general building materials (USLM). In services, concentrate on truckers, restaurants, and rails. The best technology groups are semi ICs (DIOD, RFMD, OVTI), diversified electronics (SIMO, MEI), and semi equipment (ATMI, KLIC). Managers should remember; however, that the SEMI book-to-bill typically peaks in the second quarter.

SMALL CAP INDUSTRY SCORE

 

6/12/2014

Sector

INDUSTRY

Score

 

 

 

BASIC MATERIALS

INDEPENDENT OIL & GAS

56.67

BASIC MATERIALS

STEEL & IRON

48.57

BASIC MATERIALS

OIL & GAS DRILLING & EXPLORATION

46.67

BASIC MATERIALS

INDUSTRIAL METALS & MINERALS

43.00

BASIC MATERIALS

GOLD

34.00

CONSUMER GOODS

AUTO PARTS

70.00

CONSUMER GOODS

PROCESSED & PACKAGED GOODS

51.25

CONSUMER GOODS

TEXTILES

45.00

CONSUMER GOODS

HOME FURNISHING & FIXTURES

38.33

FINANCIALS

PROPERTY & CASUALITY INSURANCE

71.00

FINANCIALS

REGIONAL BANKS

51.43

FINANCIALS

INVESTMENT BROKERAGE

46.25

FINANCIALS

SAVINGS & LOANS

45.56

FINANCIALS

CREDIT SERVICES

36.25

HEALTHCARE

MEDICAL INSTRUMENTS & SUPPLIES

51.67

HEALTHCARE

HOME HEALTH CARE

50.71

HEALTHCARE

SPECIALIZED HEALTH SERVICES

50.00

HEALTHCARE

MEDICAL APPLIANCES & EQUIPMENT

49.17

HEALTHCARE

BIOTECHNOLOGY

47.14

HEALTHCARE

DRUG MANUFACTURERS

42.33

HEALTHCARE

DRUG RELATED PRODUCTS

40.00

INDUSTRIAL GOODS

GENERAL BUILDING MATERIALS

56.67

INDUSTRIAL GOODS

AEROSPACE/DEFENSE  PRODUCTS & SERVICES

51.00

INDUSTRIAL GOODS

INDUSTRIAL ELECTRICAL EQUIPMENT

48.33

INDUSTRIAL GOODS

HEAVY CONSTRUCTION

46.25

SERVICES

TRUCKING

78.33

SERVICES

RESTAURANTS

70.00

SERVICES

RAILROADS

66.67

SERVICES

CATALOG & MAIL ORDER HOUSES

58.33

SERVICES

MANAGEMENT SERVICES

57.50

SERVICES

SPECIALTY RETAIL, OTHER

56.67

SERVICES

MARKETING SERVICES

53.33

SERVICES

BUSINESS SERVICES

50.00

SERVICES

STAFFING & OUTSOURCING SERVICES

46.00

SERVICES

EDUCATION & TRAINING SERV

45.83

SERVICES

APPAREL STORES

42.08

SERVICES

RESORTS AND CASINOS

40.00

SERVICES

BROADCASTING

33.00

TECHNOLOGY

SEMICONDUCTOR- INTEGRATED CIRCUITS

62.14

TECHNOLOGY

DIVERSIFIED ELECTRONICS

60.00

TECHNOLOGY

SEMICONDUCTOR EQUIPMENT & MATERIALS

57.50

TECHNOLOGY

BUSINESS SOFTWARE & SERVICES

50.00

TECHNOLOGY

PRINTED CIRCUIT BOARDS

48.75

TECHNOLOGY

SEMICONDUCTOR-SPECIALIZED

48.33

TECHNOLOGY

INFORMATION TECHNOLOGY SERVICES

45.83

TECHNOLOGY

COMMUNICATION EQUIPMENT

45.63

TECHNOLOGY

INTERNET INFORMATION PROVIDER

45.00

TECHNOLOGY

INTERNET SERVICE PROVIDERS

45.00

TECHNOLOGY

NETWORKING & COMMUNICATION DEVICES

45.00

TECHNOLOGY

SCIENTIFIC & TECHNICAL INSTRUMENTS

44.50

TECHNOLOGY

WIRELESS COMMUNICATIONS

41.25

TECHNOLOGY

INTERNET SOFTWARE & SERVICES

38.33

TECHNOLOGY

APPLICATION SOFTWARE

37.00

TECHNOLOGY

COMPUTER PERIPHERALS

31.67

None.

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