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Small Cap Best & Worst Report

By Todd Campbell
Date: Thursday, July 31, 2014 12:52 PM EST

Since 2010, the average return for our weekly best scoring small caps has outpaced the R2K by an average 757 bps in the following year. The top performers from our report one year ago include JAZZ up 87%, UEIC up 56%, KFY up 52%, and EVOL up 45%.

 

  • Utilities score best across small cap.
  • The top scoring small cap industry is management services.

The average small cap score is 50.32 this week, below the four week moving average score of 52.32. The average small cap stock is trading -27.15% below its 52 week moving average (getting interesting ahead of Q4 seasonal strength), -4.9% below its 200 dma, and has 8.41 days to cover held short.

Utilities, financials and consumer goods score above average. Industrial goods, technology, services, basics, and healthcare stocks score in line with the small cap universe. No sectors score below average this week.

 

The top scoring small cap industry is management services (CRAI, NCI). Business software & services (TSYS, MSTR, NTCT) also score highly. Computer peripherals (PLNR) offer opportunity. Restaurant (BJRI, RT) foot traffic and same store sales growth support revenue growth. Semi ICs (RFMD, TQNT, PLXT) score high; however, seasonal support fades from here.

In small cap basics, buy independent oil & gas (CRK, PQ, GDP). In consumer goods, focus on processed & packaged goods (DMND) and textiles (PERY). The top financials baskets include P&C insurers (HMN), S&L's (BRKL), and regional banks (CFNL). In healthcare, buy home healthcare (CHE, GTIV, AMED) and medical appliances (BABY, RTIX, GB, ARTC, OFIX, NXTM, GIVN). Only industrial electrical equipment (BGC) is above average in industrial goods. In services, concentrate on management services, restaurants, and rails (GBX, ARII). Business software, computer peripherals, and semi ICs are strongest in technology.

 

Disclosure: None.