E Small Cap Best & Worst Report - March 5, 2015

The best scoring small caps from our weekly reports have outpaced the IWM by a median 657 bps in the following year.

  • Utilities score best across small cap.
  • The top small cap industry is specialized semiconductor.

The average small cap score is 57.87, which is above the four week moving average score of 57.3. The average small cap stock is trading -40.65% below its 52 week high, 4.31% above its 200 dma, and has 7.97 days to cover held short.

The best small cap sector is utilities. Consumer goods, technology, and healthcare also score above the small cap universe average score. Services score in line with the average score. Financials, industrials, and basics score below average.

Specialized semiconductor (QLGC, MPWR, SIGM), semiconductor ICs (DIOD, EMKR, RFMD, OPLK), and semi equipment & materials (OSIS, ATMI, AMBA, TSRA) all score at the top of our best small cap industry ranking. The ongoing electrification of things supports demand and drives consolidation. Restaurant (RRGB, BJRI, SONC) foot traffic and same store sales growth supports earnings. Scientific & technical instrument (AFFX, FLDM, ALOG, PRCP, NEWP, NANO) demand is supported by R&D budget clarity and robust access to funding for tech and life sciences.

No small cap basics baskets score above the universe average score. In consumer goods, focus on home furnishings (SCSS, STLY) and textiles (PERY, BEBE, RCKY). P&C insurers (MIG, STFC), credit services (FMD, WRLD), and investment brokers (GFIG) are best across financials. In healthcare, concentrate on specialized health services (BEAT, PRSC, USPH), medical appliances (RTIX, OFIX, CNMD, BABY, GB, CYNO, CUTR), and home healthcare (CHE, AFAM, ADUS). Aerospace/defense (LMIA) score above average in industrial goods. Restaurants, staffing (KFRC, CDI), and resorts & casinos (PENN, BYD) are strongest in services. The best technology groups are specialized semi, semi ICs, and scientific & technical instruments.

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Disclosure: None.

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