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Small Cap Report: Best And Worst

By Todd Campbell
Date: Thursday, March 27, 2014 12:32 PM EST
Views: 280

The highest scoring names in small cap from 1 year ago (3/28/2013) returned 1,033 bps more than the Russell 2000.  The best performers have been RAD up 251%, CAMP up 153%, GBX up 104%, MDSO up 96%, HOMB up 90%, and LOJN up 82%.

  • Utilities (small sample size), consumer, and industrials score best.
  • The top small cap industry is P&C insurance.

The average small cap score is 50.87, below the four week moving average score of 56.79.  The average small cap is -20.75% off its 52 week high, 5.60% above its 200 dma, and has 6.77 days to cover held short.
 
Utilities, consumer, industrials, services, and financials score above average. Basics score in line. Technology and healthcare score below average.
 
NOTE: Scores will roll to reflect Q2 seasonality next week. This will affect leadership.

SMALL CAP       3/20/2014 3/27/2014 4 Week MA
Company Name Symbol Sector INDUSTRY SCORE SCORE SCORE
BEST            
Cali. Water Svcs. CWT UTILITIES WATER UTILITIES 95 100 97.5
Diodes Inc DIOD TECHNOLOGY SEMICONDUCTOR- INTEGRATED CIRCUITS 105 85 93.75
Francesca's Holdings FRAN SERVICES SPECIALTY RETAIL, OTHER 80 85 82.5
Mercantile Bank MBWM FINANCIALS REGIONAL BANKS 85 85 83.75
Orthofix OFIX HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 85 85 83.75
Twin Disc TWIN INDUSTRIAL GOODS DIVERSIFIED MACHINERY 85 85 82.5
Agilysys Inc AGYS SERVICES ELECTRONICS WHOLESALE 100 80 97.5
Builders FirstSource BLDR SERVICES HOME IMPROVEMENT STORES 95 80 93.75
Chemed Inc CHE HEALTHCARE HOME HEALTH CARE 100 80 93.75
Cali. Water Svcs. CWT UTILITIES WATER UTILITIES 100 80 92.5
Finish Line Inc FINL SERVICES APPAREL STORES 95 80 93.75
MarineMax, Inc. HZO SERVICES SPECIALTY RETAIL, OTHER 95 80 86.25
Jakks Pacific Inc. JAKK CONSUMER GOODS TOYS & GAMES 75 80 78.75
Penford Corp PENX BASIC MATERIALS SPECIALTY CHEMICALS 95 80 87.5
Qlogic QLGC TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 70 80 72.5
Heartware Int'l HTWR HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 95 80 91.25
             
WORST            
UT Starcom UTSI TECHNOLOGY WIRELESS COMMUNICATIONS 25 20 22.5
Affymax AFFY HEALTHCARE BIOTECHNOLOGY 15 25 17.5
Coeur D Alene CDE BASIC MATERIALS SILVER 20 25 18.75
Cott Corp COT CONSUMER GOODS BEVERAGES 25 25 25
Cardiome Pharma CRME HEALTHCARE DRUG MANUFACTURERS 50 25 42.5
Earthlink ELNK TECHNOLOGY INTERNET SERVICE PROVIDERS 15 25 18.75
Hi Tech Pharma HITK HEALTHCARE DRUGS-GENERIC 30 25 26.25
Harmony Gold Mining HMY BASIC MATERIALS GOLD 50 25 31.25
Kopin KOPN TECHNOLOGY DIVERSIFIED ELECTRONICS 25 25 32.5
Quicksilver Res Inc KWK BASIC MATERIALS INDEPENDENT OIL & GAS 25 25 40
LSI Industries Inc LYTS CONSUMER GOODS BUSINESS EQUIPMENT 30 25 23.75
Rediff.com REDF TECHNOLOGY INTERNET INFORMATION PROVIDER 10 25 15
Sify Ltd SIFY TECHNOLOGY INTERNET SERVICE PROVIDERS 20 25 22.5
Sigma Designs SIGM TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 20 25 20
Cambrex CBM HEALTHCARE BIOTECHNOLOGY 50 25 45
Cross Country Healthcare CCRN SERVICES STAFFING & OUTSOURCING SERVICES 50 25 45
Geron GERN HEALTHCARE BIOTECHNOLOGY 15 25 32.5
Triple-S Management GTS FINANCIALS ACCIDENT & HEALTH INSURANCE 15 25 20
Pain Thera PTIE HEALTHCARE BIOTECHNOLOGY 50 25 42.5
Verastem Inc VSTM HEALTHCARE BIOTECHNOLOGY 25 25 32.5

Seasonality shifts neutral for the coming three months. The Russell 2000 has gained in 6 of the past 10 years, producing an average return of 2.72%, with a standard deviation of 8.37%.

The top small cap industry is property & casualty insurers (STFC, MIG). Rate growth in 2013 offers profit opportunity in 2014. Fewer cat claims helped industry net income grow 60% year-over-year in 2013, aided by the best combined ratio since 2007. It will be hard matching that performance, so watch hurricane season closely. Restaurants (RRGB, DAVE, BJRI) score highly. The 17 restaurants in our all-cap universe are expected to post EPS growth of 13.3% next year. Apparel stores (FINL, PLCE, CACH) benefit from improving weather. Clothing retail sales in February came in 2.6% higher year-over-year. Processed & packaged goods (KTEC, BDBD) round out the best small cap industry list this week.

In small cap basics, only industrial metals & minerals (BOOM) score above average. Trade up in market cap where possible. In consumer goods, focus on processed & packaged goods, home furnishings (STLY, SCSS), and textiles (DXYN, PERY). The best financials baskets include P&C insurers, regional banks (MBWM, CFNL), and savings & loans (NWBI, PROV). In healthcare, buy home healthcare (CHE, ADUS), medical instruments (HTWR, VASC), and medical appliances (OFIX, CYBX, BABY). No industrial goods basket scores above average, focus on large and mid cap instead. In services, concentrate on restaurants, apparel services, and business services (EXAM, CGX). The top technology groups are semi ICs (DIOD, PLXT), scientific & technical instruments (ALOG, FLDM, AFFX), and specialized semiconductor (QLGC, MPWR). Semi book-to-bill historically peaks in the second quarter -- position accordingly.

 

SMALL CAP INDUSTRY SCORE   3/27/2014
Sector INDUSTRY Score
     
BASIC MATERIALS INDUSTRIAL METALS & MINERALS 58.00
BASIC MATERIALS INDEPENDENT OIL & GAS 51.00
BASIC MATERIALS STEEL & IRON 49.29
BASIC MATERIALS OIL & GAS DRILLING & EXPLORATION 43.33
BASIC MATERIALS GOLD 43.00
CONSUMER GOODS PROCESSED & PACKAGED GOODS 61.25
CONSUMER GOODS HOME FURNISHING & FIXTURES 56.67
CONSUMER GOODS TEXTILES 56.00
CONSUMER GOODS AUTO PARTS 48.00
FINANCIALS PROPERTY & CASUALITY INSURANCE 64.00
FINANCIALS REGIONAL BANKS 57.86
FINANCIALS SAVINGS & LOANS 56.67
FINANCIALS CREDIT SERVICES 47.50
FINANCIALS INVESTMENT BROKERAGE 45.00
HEALTHCARE HOME HEALTH CARE 52.86
HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 51.90
HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 51.90
HEALTHCARE SPECIALIZED HEALTH SERVICES 50.71
HEALTHCARE DRUG RELATED PRODUCTS 50.00
HEALTHCARE BIOTECHNOLOGY 46.48
HEALTHCARE DRUG MANUFACTURERS 43.67
INDUSTRIAL GOODS GENERAL BUILDING MATERIALS 51.25
INDUSTRIAL GOODS HEAVY CONSTRUCTION 51.25
INDUSTRIAL GOODS AEROSPACE/DEFENSE  PRODUCTS & SERVICES 49.00
INDUSTRIAL GOODS INDUSTRIAL ELECTRICAL EQUIPMENT 46.67
SERVICES RESTAURANTS 63.00
SERVICES APPAREL STORES 62.31
SERVICES BUSINESS SERVICES 56.67
SERVICES RAILROADS 55.00
SERVICES SPECIALTY RETAIL, OTHER 55.00
SERVICES EDUCATION & TRAINING SERV 53.33
SERVICES STAFFING & OUTSOURCING SERVICES 51.00
SERVICES TRUCKING 50.00
SERVICES MANAGEMENT SERVICES 48.75
SERVICES RESORTS AND CASINOS 48.75
SERVICES MARKETING SERVICES 46.67
SERVICES CATALOG & MAIL ORDER HOUSES 45.00
SERVICES BROADCASTING 43.00
TECHNOLOGY SEMICONDUCTOR- INTEGRATED CIRCUITS 60.00
TECHNOLOGY SCIENTIFIC & TECHNICAL INSTRUMENTS 59.00
TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 56.67
TECHNOLOGY BUSINESS SOFTWARE & SERVICES 53.75
TECHNOLOGY SEMICONDUCTOR EQUIPMENT & MATERIALS 53.75
TECHNOLOGY NETWORKING & COMMUNICATION DEVICES 53.33
TECHNOLOGY DIVERSIFIED ELECTRONICS 50.00
TECHNOLOGY COMMUNICATION EQUIPMENT 48.57
TECHNOLOGY INTERNET SOFTWARE & SERVICES 48.33
TECHNOLOGY INTERNET INFORMATION PROVIDER 47.50
TECHNOLOGY PRINTED CIRCUIT BOARDS 46.25
TECHNOLOGY APPLICATION SOFTWARE 44.17
TECHNOLOGY INFORMATION TECHNOLOGY SERVICES 44.17
TECHNOLOGY COMPUTER PERIPHERALS 36.67
TECHNOLOGY WIRELESS COMMUNICATIONS 33.75
TECHNOLOGY INTERNET SERVICE PROVIDERS 28.33

 

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