CHICAGO, Aug. 28, 2014 /PRNewswire/ -- Stocks in this week's article include: Multi-Color (NASDAQ: LABL – Free Report), Silicon Motion Technology (NASDAQ: SIMO – Free Report), ICON plc. (NASDAQ: ICLR – Free Report), Akorn, Inc. (NASDAQ: AKRX – Free Report) and Sealed Air Corp. (NYSE: SEE – Free Report). Small-cap stocks are often market leaders, but don't overlook the mid-caps and large-caps. See how that leadership has changed over the years and which one is in the lead now.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
When most people think of outperforming stocks, small-cap stocks typically come to mind.
But there are years when small caps are the worst performers. And instead, mid-caps and large-caps are the clear winners.
Like the seasons, certain types of stocks rotate in and out of favor. And if you concentrate on only one type of stock, it could be to your detriment when that group is no longer the leader.
I put these market-caps to the test by creating three screens: one with market-caps less than $1 billion (small-caps), one with market-caps between $1 billion and $5 billion (mid-caps), and one with market-caps greater than $5 billion (large-caps).
Each screen also consisted of only stocks trading over $3 with an average daily trading volume of over 50,000 shares. I then backtested these screens using a one-week holding period for each of the last nearly thirteen years (2002–YTD 2014).
While the most significant outperformance was seen by small-caps; the mid-caps and large-caps also performed well, oftentimes with less volatility or drawdowns.
So what do all of these statistics mean, knowing that some market-caps are better than others in different years? It means that you should have a mix of everything in your portfolio.
Learn all about this strategy in the complete Screen of the Week article by visiting Zacks.com at: http://www.zacks.com/commentary/34108/
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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