The best scoring mid caps from one year ago (2/20/2013) averaged 160 bps of excess over the S&P 400, with 0% turnover.  The top performers include GMCR up 164%, NFLX up 133%, VRX up 121%, HBI up 89%, UTHR up 83%, and SIVB up 78%.


 

• The best mid cap sector is industrial goods
• The top mid cap industry is residential construction.

The average mid cap score is 68.04, above the four week moving average score of 65.77.  The average mid cap is trading -12.2% below its 52 week high, 5.18% above its 200 dma, has 6.3 days to cover short, and is expected to grow EPS by 18% next year.
 
The best mid cap sector is industrial goods, followed by consumer goods. Financials and healthcare also score above average. Technology scores in line. Basics, services, and utilities score below average.

Commentary:

The best scoring mid cap industry is residential construction (NVR, KBH, RYL) Builder confidence fell to its lowest since last March, according to the NAHB/WFC Housing Market Index. Weather is weighing down showings, but the bigger takeaway may be builder's fear of too few workers and lots. Those fears may be reflected in slowing year-over-year permit growth.  In January, permits were 2.4% above last year.  Housing starts also slid 2% (+/- 10%!) from a year ago.  That said, housing completions were 13% higher year-over-year in January and the median home price grew to 270k in December, up from 258k the year before.  Truckers (HTLD, ODFL, KNX) offer upside as the NRF expects retail industry sales -- a major driver of truck hauls -- will grow 4.1%, above 2013's 3.7% rate. The level of activity at for-haul truckers in December was the 2nd highest on record, according to the Freight Transportation Services Index. Year-to-date, freight shipments grew 4.4% from a year ago in December. Semi equipment (TER) remains high scoring in line with the seasonal improvement in book-to-bill ratios.  December's Semi book-to-bill ratio of 1.02 outpaces the 0.92 ratio from December 2012. Education (DV, LOPE) and asset managers (AB, OZM, WETF) round out the best mid cap industries ranking this week.

The best scoring mid cap basics industry is drillers (PTEN, NBR), followed by steel & iron (CMC, STLD, CRS), and synthetics (CMP, POL). The top consumer groups are textiles (COLM, SKX, DECK), and business equipment (DBD, PAY).  In financials, focus on asset managers, accident & health (CNO, AIZ), and REITs (KRC, ARE, NNN).  Buy medical instruments (TFX, WST, DXCM, PKI), and biotech (CRL, GEVA, TECH, THRX) in healthcare. Every mid cap industrials group scores above average; concentrate on residential construction, industrial electrical equipment (LFUS, BDC), and aerospace/defense (ESL, CW, TDY, HXL). The top services industries are trucking, education, and restaurants (WEN, PZZA, EAT).  In technology, buy semi equipment, technical & system software (CDNS, MCRS), and computer peripherals (ZBRA, LXK).