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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