Since 2010, the best scoring names in our weekly mid cap reports have outpaced the S&P 400 by a median 4.07% in the following year. The best performers from our list from 1 year ago are ILMN up 95%, LVLT up 71%, LRCX up 61%, and ALXN up 58%.
The average mid cap score is 65.26, above the four week moving average of 65.01. The average mid cap stock is trading -14.62% below its 52 week high, 2.44% above its 200 dma, has 6.45 days to cover held short, and is expected to post EPS growth of 16.6% next year.
The best mid cap sector is consumer goods. Services and industrial goods also score above average. Healthcare, financials, technology, and utilities score in line. Basics score below average.
Truck volume growth supports freight rates (HTLD, ODFL, KNX). The Freight Transportation Services Index registered 121.5 in September, hitting a record high. Technical & system software (CDNS, TYL, MENT) demand benefits from growing adoption of software used to design increasingly faster, smaller, and more efficient computer chips. Education (DV, APOL) and training stocks are improving as financing improves. Student loans owned and securitized increased to $1,307.2 billion in Q3 from $1,211 billion a year ago (see chart further below). Business services (RBA, VPRT, MMS, GPN) offer opportunity for rising demand as economic growth picks up. Insurance enrollment in both exchange plans and public plans support medical instrument (HRC, HAE, PODD, TFX, PKI, NUVA) demand. Potential regulatory support could develop on Capitol Hill in the form of legislation repealing the 2.3% medical device tax.
The only mid cap basics basket to score above average is synthetics (MTX, CMP). Textiles (DECK, COLM, CRI), processed & packaged goods (HAIN, FLO), and business equipment (HNI, PAY) score best in consumer goods. The top financials industries include investment brokers (GBL, MKTX), regional banks (OZRK, ASBC, FFIN, FHN, HBHC), and surety & title insurance (AGO, RDN). In healthcare, focus on medical instruments. Across industrial goods, concentrate on residential construction (NVR, RYL), industrial electrical equipment (RBC, AOS), and aerospace/defense (TDY, HXL, MOGA, ESL). In September, new single family home starts totaled 1.017 million, up from 863k last year. Trucking, education, and business services are top scoring across services. Technical & system software, semi ICs (IRF, MSCC), and business software (SSNC, CTSH, INFA) are best in technology.
