· The strongest small cap sectors are utilities and consumer goods.
· The best small cap industry is general building materials.
After rolling scores to reflect second quarter seasonality, the average small cap score is 50.44, which is below the four week average score of 51.62. The Russell 2k (IWM) offers pedestrian seasonality in Q2, gaining ground in 6 of the past 10 years and producing a median return of 0.75% in the period.
SOURCE: SEASONAL INVESTOR
The average small cap stock in our universe is trading -34.1% below its 52 week high, -1.41% below its 200 dma, and has 8.18 days to cover held short. Utilities, consumer, industrial goods, and technology score best. Basics score in line with the average universe score. Financials, healthcare, and services score below average.
These small cap stocks offer the best track record for posting second quarter gains.
SOURCE: SEASONAL INVESTOR
The top scoring small cap industry is general building materials (USLM, NCS). Business software (CSGS, PRFT, TSYS, EBIX), processed & packaged goods (BDBD), specialized semi (MPWR, QLGC), and auto parts (SRI) also score high.
Gold and steel & iron (SCHN, ROCK) are best in basics. Processed & packaged goods and auto parts can be bought in consumer goods. No financials basket scores above average. The top healthcare industries are specialized health services (PRSC, AHS), medical instruments (IART, CMN, MMSI, LMNX, LMAT, ICUI), and drug related products (NUTR). General building materials and aerospace/defense (AVAV) are top scoring in industrial goods. Resorts & casinos (BYD, PENN), specialty retail (MED, FRAN), and marketing services (ABTL) offer upside in services. Business software, specialized semiconductor, and semi equipment & materials (UTEK) are strongest in technology.
