E Small Cap Best Stocks To Buy – February 4, 2016

·       The strongest small cap sectors are utilities and consumer goods.

·       The best small cap industry is specialized semiconductor.

The average small cap score is 48.27 and that’s above the four week average score of 46.81. The average small cap stock in our universe is trading -39.11% below its 52 week high, -13.47% below its 200 dma, and has 7.5 days to cover held short.

Utilities, consumer goods, technology, and services score above the average universe score. Financials, industrial goods, healthcare, and basic materials score below average.

The best scoring small cap industry is specialized semiconductor (QLGC, MPWR). Other high scoring small cap industries include business software (EBIX, CSGS, PRFT, TSYS), semi ICs (OVTI), resorts & casinos (CNTY, BYD), and processed & packaged goods (BDBD, MGPI).

Gold (DRD, NG) is the only small cap group to score above average in basics. In consumer goods, concentrate attention on processed & packaged goods and home furnishings (SCSS). Regional banks (CFNL, LKFN) and S&Ls (NWBI, OCFC, BRKL) can be bought in financials. Drug related products (NAII) are the only basket to score above average in healthcare. Heavy construction (GVA) can be bought in industrial goods. The strongest services industries are resorts & casinos, restaurants (SONC, BJRI), and apparel stores (PLCE, SMRT, SCVL). Specialized semiconductors, business software, and semi ICs are top scoring in technology.

Historically, the next few months have been a period of robust returns for technology stocks.