- The best mid cap sectors are utilities and basics.
- The highest scoring mid cap is gas utilities.
Stay on the sidelines until day three post-Brexit vote and then use rebounding markets to de-risk.
The average mid cap score is 50.42 and the four week average score is 56.60. IMPORTANT: We have rolled scores to reflect third quarter seasonality. The impact of our regular scheduled quarterly shift in the seasonality component of our model is magnified by post- Brexit market action.
The following chart will be familiar to long-time clients because we typically break it out around inflection points. The chart shows how many stocks in our universe are trading greater than 5% below their 200 dma. Historically, this measure is actionable at extremes.
Utilities, basic materials, consumer goods, and industrial goods score best in mid cap. Healthcare and financials score in line with the average universe score. Technology and services score below average.
The following are the top and bottom scoring in mid cap after our shift to Q3 seasonality.
The following chart shows historical mid cap average score since pre-Great Recession.
The best mid cap industries are gas utilities (EGN, NJR), oil & gas equipment & services (HLX), oil & gas drilling & exploration (PTEN), REITs (REG, WRI, NNN, CLI), and processed and packaged goods (GIS, HAIN).
Oil & gas equipment & services and oil & gas drilling & exploration score best in mid cap basics. Processed & packaged goods and auto parts (CLC, FDML) are top scoring in consumer. Focus on REITs and accident & health insurance (AFL) in financials. The best healthcare groups are medical appliances (ALGN, MASI) and medical instruments (WST, TFX, NUVA). Industrial electrical (AOS), aerospace/defense (CW, CAE), and diversified machinery (MIDD) can be bought in industrials. Concentrate on movies and business services (HCSG, RBA, FICO) in services. Application software (LOCK), information & delivery services (SAIC), and technical & system software (TYL) are high scoring in technology. Gas utilities can also be bought.
