Small Cap Investment Report

The best scoring small caps from one year ago (12/27/2012) have outperformed the R2K by 911 bps over the past year, with no turnover.  The best performers have been RAD up 263%, JAZZ up 136%, RRGB, up 121%, TREX up 120% and TYL up 117%.     View or Print version:   http://gallery.mailchimp.com/99d224f3954c728b48e754ddb/files/SMALL_CAP_Best_Worst.12.pdf The best small cap sector is industrial goods. The top scoring small cap industry is industrial metals & minerals. Important!  Scores have shifted to reflect Q1 seasonality.  The average small cap company score is 66.19, above the four week moving average score of 64.52.  The average small cap is trading 9.95% above its 200 dma, has 7.24 days to cover short, and is expected to see EPS growth of 34% next year.   Industrials, services, financials, and consumer score above average.  Basics, utilities, technology, and healthcare score below average.     SMALL CAP       12/26/2013 4 Week MA Company Name Symbol Sector INDUSTRY SCORE SCORE BEST           Mercantile Bank MBWM FINANCIALS REGIONAL BANKS 110 78.75 Twin Disc TWIN INDUSTRIAL GOODS DIVERSIFIED MACHINERY 110 96.25 Agilysys Inc AGYS SERVICES ELECTRONICS WHOLESALE 105 77.5 Century Aluminum CENX BASIC MATERIALS ALUMINUM 105 73.75 Hanger Orthopedic HGR HEALTHCARE SPECIALIZED HEALTH SERVICES 105 76.25 Wintrust Fin'l WTFC FINANCIALS REGIONAL BANKS 105 87.5 Advisory Board Co ABCO SERVICES RESEARCH SERVICES 100 86.25 Affymetrix Inc AFFX TECHNOLOGY SCIENTIFIC & TECHNICAL INSTRUMENTS 100 82.5 Ann Taylor ANN SERVICES APPAREL STORES 100 58.75 Infospace BCOR TECHNOLOGY INTERNET INFORMATION PROVIDER 100 92.5 Belden CDT BDC INDUSTRIAL GOODS INDUSTRIAL ELECTRICAL EQUIPMENT 100 100 Builders FirstSource BLDR SERVICES HOME IMPROVEMENT STORES 100 60 C B R L Group CBRL SERVICES RESTAURANTS 100 90 Cardinal Fin'l CFNL FINANCIALS REGIONAL BANKS 100 77.5 Chemed Inc CHE HEALTHCARE HOME HEALTH CARE 100 80 Cali. Water Svcs. CWT UTILITIES WATER UTILITIES 100 75 Domino's Pizza Inc DPZ SERVICES FOOD WHOLESALE 100 93.75 First Fin'l Bankshares FFIN FINANCIALS REGIONAL BANKS 100 97.5 Greenbrier Companies Inc GBX SERVICES RAILROADS 100 82.5 Genesco Inc. GCO SERVICES APPAREL STORES 100 73.75 Littelfuse LFUS INDUSTRIAL GOODS INDUSTRIAL ELECTRICAL EQUIPMENT 100 85 PLX Technology Inc. PLXT TECHNOLOGY SEMICONDUCTOR- INTEGRATED CIRCUITS 100 76.25 Perceptron Inc PRCP TECHNOLOGY SCIENTIFIC & TECHNICAL INSTRUMENTS 100 51.25 Red Robin Gourmet Burgers Inc RRGB SERVICES RESTAURANTS 100 85 Sun Hydraulics Inc SNHY INDUSTRIAL GOODS INDUSTRIAL EQUIPMENT & COMPONENTS 100 86.25 Dealertrack Hldgs Inc TRAK TECHNOLOGY APPLICATION SOFTWARE 100 86.25 Amerco Inc UHAL SERVICES RENTAL & LEASING SERVICES 100 97.5 Encore Wire WIRE BASIC MATERIALS COPPER 100 93.75 Olympic Steel Inc ZEUS BASIC MATERIALS STEEL & IRON 100 78.75 Transaction Sys Architects ACIW TECHNOLOGY TECHINICAL & SYSTEM SOFTWARE 95 92.5 Align Tech ALGN HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 95 71.25 Bon Ton Stores BONT SERVICES DEPARTMENT STORES 95 86.25 Dynamic Materials BOOM BASIC MATERIALS INDUSTRIAL METALS & MINERALS 95 82.5 Calgon Carbon Corp. CCC INDUSTRIAL GOODS POLLUTION & TREATMENT CONTROLS 95 96.25 C D I Corp CDI SERVICES STAFFING & OUTSOURCING SERVICES 95 78.75 Coherent Inc COHR TECHNOLOGY SCIENTIFIC & TECHNICAL INSTRUMENTS 95 88.75 Carrizo Oil and Gas Inc CRZO BASIC MATERIALS INDEPENDENT GAS & OIL 95 92.5 Dixie Group DXYN CONSUMER GOODS TEXTILES 95 65 Finish Line Inc FINL SERVICES APPAREL STORES 95 83.75 Hub Group Inc HUBG SERVICES AIR DELIVERY & FREIGHT SERVICES 95 75 MarineMax, Inc. HZO SERVICES SPECIALTY RETAIL, OTHER 95 96.25 Intevac Inc IVAC TECHNOLOGY DIVERSIFIED ELECTRONICS 95 81.25 Middleby Corp MIDD INDUSTRIAL GOODS DIVERSIFIED MACHINERY 95 98.75 Northwest Bancorp Inc NWBI FINANCIALS SAVINGS & LOANS 95 96.25 Sturm Ruger & Co. RGR CONSUMER GOODS SPORTING GOODS 95 76.25 Saba Software SABA TECHNOLOGY INTERNET SOFTWARE & SERVICES 95 81.25 Silicom LTD SILC TECHNOLOGY NETWORKING & COMMUNICATION DEVICES 95 92.5 S S & C  Tech SSNC TECHNOLOGY BUSINESS SOFTWARE & SERVICES 95 92.5 State Auto Financial Corp STFC FINANCIALS PROPERTY & CASUALITY INSURANCE 95 80 Universal Electronics Inc UEIC CONSUMER GOODS ELECTRONIC EQUIPMENT 95 92.5             WORST           Rediff.com REDF TECHNOLOGY INTERNET INFORMATION PROVIDER 10 11.25 Affymax AFFY HEALTHCARE BIOTECHNOLOGY 15 23.75 Sigma Designs SIGM TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 15 32.5 Coeur D Alene CDE BASIC MATERIALS SILVER 20 28.75 U S Global Investors, Inc. GROW FINANCIALS ASSET MANAGEMENT 20 26.25 S T R Holdings STRI TECHNOLOGY SEMICONDUCTOR- SPECIALIZED 20 16.25 UT Starcom UTSI TECHNOLOGY WIRELESS COMMUNICATIONS 20 22.5 Yellow Roadway Corporation YRCWD SERVICES TRUCKING 20 41.25     Commentary: The best small cap industry heading into 2014 is industrial metals & minerals (BOOM, RTI).  Sporting goods (RGR, SWHC) offer upside too.  Farm & construction machinery (ASTE, CMCO) benefit from potential recovery in Europe and U.S. commercial construction activity.  Regional banks (MBWM, WTFC, FFIN, CFNL) offer an opportunity as banks put excess deposits to work to boost loan portfolios.  Technical & system software (ACIW, TYL) also score highly.     In basics, buy industrial metals & minerals, steel & iron (ZEUS, HSC), and synthetics (POL, MTX).  In consumer, the best scoring baskets include sporting goods, business equipment (HNI), and processed & packaged goods (BDBD, HAIN).  The top finance industries are regional banks, P&C insurers (STFC, GLRE), and S&Ls (NWBI, OCN, BANR).  In healthcare, only home healthcare (CHE, GTIV) and specialized health services (HGR) score above average.  In industrials, buy farm & construction machinery, metal fabrication (MATW), and diversified machinery (TWIN, MIDD, BGG).   In services, focus on railroads (GBX), research services (ABCO, FORR), and staffing (CDI, KFRC, BBSI).  The top technology groups include technical & system software, scientific & technical instruments (PRCP, AFFX, COHR, NEWP, NANO), and business software (SSNC, VRNT, PRFT, PEGA, NTCT, CSGS).   SMALL CAP INDUSTRY SCORE   12/26/2013 Sector INDUSTRY Score       BASIC MATERIALS INDUSTRIAL METALS & MINERALS 90.00 BASIC MATERIALS STEEL & IRON 75.83 BASIC MATERIALS SYNTHETICS 72.50 BASIC MATERIALS OIL & GAS EQUIPMENT & SERVICES 70.00 BASIC MATERIALS INDEPENDENT OIL & GAS 57.86 BASIC MATERIALS OIL & GAS DRILLING & EXPLORATION 48.33 CONSUMER GOODS SPORTING GOODS 86.25 CONSUMER GOODS BUSINESS EQUIPMENT 72.50 CONSUMER GOODS PROCESSED & PACKAGED GOODS 71.00 CONSUMER GOODS HOME FURNISHING & FIXTURES 68.33 CONSUMER GOODS TEXTILES 66.43 CONSUMER GOODS AUTO PARTS 62.00 CONSUMER GOODS PERSONAL PRODUCTS 60.00 CONSUMER GOODS FARM PRODUCTS 55.00 FINANCIALS REGIONAL BANKS 85.00 FINANCIALS PROPERTY & CASUALITY INSURANCE 74.00 FINANCIALS SAVINGS & LOANS 68.50 FINANCIALS INVESTMENT BROKERAGE 68.33 FINANCIALS REITS 51.67 FINANCIALS CREDIT SERVICES 46.67 HEALTHCARE HOME HEALTH CARE 81.25 HEALTHCARE SPECIALIZED HEALTH SERVICES 71.67 HEALTHCARE MEDICAL INSTRUMENTS & SUPPLIES 67.14 HEALTHCARE MEDICAL APPLIANCES & EQUIPMENT 66.94 HEALTHCARE DRUG RELATED PRODUCTS 61.67 HEALTHCARE DRUG MANUFACTURERS 56.67 HEALTHCARE DRUGS-GENERIC 55.00 HEALTHCARE BIOTECHNOLOGY 53.95 INDUSTRIAL GOODS FARM & CONSTRUCTION MACHINERY 85.00 INDUSTRIAL GOODS METAL FABRICATION 82.50 INDUSTRIAL GOODS DIVERSIFIED MACHINERY 82.00 INDUSTRIAL GOODS INDUSTRIAL EQUIPMENT & COMPONENTS 81.25 INDUSTRIAL GOODS INDUSTRIAL ELECTRICAL EQUIPMENT 73.75 INDUSTRIAL GOODS RESIDENTIAL CONSTRUCTION 71.25 INDUSTRIAL GOODS GENERAL BUILDING MATERIALS 68.75 INDUSTRIAL GOODS AEROSPACE/DEFENSE  PRODUCTS & SERVICES 66.00 INDUSTRIAL GOODS HEAVY CONSTRUCTION 56.00 SERVICES RAILROADS 81.67 SERVICES RESEARCH SERVICES 81.25 SERVICES STAFFING & OUTSOURCING SERVICES 81.00 SERVICES RESTAURANTS 78.00 SERVICES CONSUMER SERVICES 77.50 SERVICES LODGING 77.50 SERVICES APPAREL STORES 75.94 SERVICES MANAGEMENT SERVICES 75.00 SERVICES BUSINESS SERVICES 70.00 SERVICES MARKETING SERVICES 70.00 SERVICES EDUCATION & TRAINING SERV 65.00 SERVICES RESORTS AND CASINOS 61.67 SERVICES SPECIALTY RETAIL, OTHER 61.43 SERVICES TRUCKING 58.00 SERVICES BROADCASTING 55.00 SERVICES CATALOG & MAIL ORDER HOUSES 55.00 TECHNOLOGY TECHINICAL & SYSTEM SOFTWARE 83.75 TECHNOLOGY SCIENTIFIC & TECHNICAL INSTRUMENTS 80.50 TECHNOLOGY BUSINESS SOFTWARE & SERVICES 72.92 TECHNOLOGY DIVERSIFIED ELECTRONICS 72.50 TECHNOLOGY APPLICATION SOFTWARE 68.57 TECHNOLOGY INFORMATION TECHNOLOGY SERVICES 66.43 TECHNOLOGY COMPUTER PERIPHERALS 65.00 TECHNOLOGY INTERNET INFORMATION PROVIDER 65.00 TECHNOLOGY SEMICONDUCTOR EQUIPMENT & MATERIALS 62.50 TECHNOLOGY SEMICONDUCTOR- INTEGRATED CIRCUITS 62.14 TECHNOLOGY NETWORKING & COMMUNICATION DEVICES 61.25 TECHNOLOGY COMMUNICATION EQUIPMENT 53.33 TECHNOLOGY PRINTED CIRCUIT BOARDS 53.33 TECHNOLOGY INTERNET SOFTWARE & SERVICES 51.67 TECHNOLOGY MULTIMEDIA & GRAPHICS SOFTWARE 50.00 TECHNOLOGY SEMICONDUCTOR-SPECIALIZED 50.00 TECHNOLOGY WIRELESS COMMUNICATIONS 33.33 TECHNOLOGY INTERNET SERVICE PROVIDERS 26.67