Stock Market Beat's Small-, Mid- and Large-Cap Watch Lists, Revised

With the end of the first quarter approaching, it is time to adjust the names in our Watch Lists. We will price all the new lists as of the close on Friday, March 30.

Frankly, we were surprised at the amount of turnover in our screens. Only 9 of the original 29 names made the cut for the new Small-Cap Watch List (which comes in at only 24 names). Still, given the level of outperformance we saw in the first quarter (actually just two months) and the fact that much of those gains were achieved early, perhaps the turnover is warranted.

So without further ado, the names on the Small-Cap chopping block from the previous list are:

Silgan Holdings (SLGN); Steel Dynamics (STLD); NVR (NVR); Middleby (MIDD); Vector Group (VCG); Sanderson Farms (SAFM); Downey Financial (DSL); Waddell & Reed (WDR); Wilshire Bancorp (WIBC); Harrington West (HWFG); Gamco Investors (GBL); Apria Healthcare (AHG); Papa John’s (PZZA); Cato Corporation (CTR); Meredith Corporation (MDP); CSG Systems (CSGS); Energy East (EAS); Dynamics Research (DRCO); Ingram Micro (IM); and Dade Behring (DADE).

The new Small-Cap Watch List is:

As with the Small Cap Watch List, we were surprised at the amount of turnover in our Mid-Cap screens. Only 7 of the original 29 names made the cut for the new list (which comes in at only 24 names.) Part of the reason for the turnover was to reduce the overlap between the Small Cap and Mid Cap Watch Lists. Now there is only one-third overlapping names rather than two thirds. Again, given the level of outperformance we saw in the first quarter (actually just two months) and the fact that much of those gains were achieved early, perhaps the turnover is warranted.

So without further ado, the names on the Mid-Cap chopping block from the previous list are:

Silgan Holdings (SLGN); Middleby (MIDD); Olin (OLN); Vector Group (VGR); Sanderson Farms (SAFM); Tesoro (TSO); Downey Financial (DSL); Waddell & Reed (WDR); Gamco (GBL); Apria Healthcare (AHG); Quest Diagnostics (DGX); ITT Educational Services (ESI); Equifax (EFX); Delhaize Group (DEG); Papa John’s (PZZA); Rent-a-Center (RCII); Cato Corp (CTR); Dassault Systemes (DASTY); Ingram Micro (IM); Energy East (EAS); South Jersey Industries (SJI); and American States Water (AWR).

The new Mid-Cap Watch List is:

Though less than the Small Cap Watch List and Mid Cap Watch List, there was still relatively high turnover in the Large-Cap Watch List. 14 of the original 33 names made the cut for the new list (which was trimmed to just 26 names). Part of the reason for the turnover was to reduce overlap between the lists. One third of the Mid Cap Watch List names appear on each of the Small Cap and Large Cap Watch Lists, but there is no longer any overlap between small and large.
So without further ado, the names on the chopping block from the previous list are:

3M (MMM); Continental (CTTAY.PK); Mitsui (MITSY); Anheuser-Busch (BUD); ConocoPhillips (COP); Helix Energy (HELX); IndyMac Bancorp (NDE - Annual Report); Barr Pharmaceutical (BRL - Annual Report); Quest Diagnostics (DGX); Public Storage (PSA); ITT Educational Services (ESI); Equifax (EFX); Rent-a-Center (RCII); Kroger (KR); Ricoh (RICOY); First Data Corp. (FDC); Expeditors International (EXPD); and Keyspan (KSE).

The new Large-Cap Watch List is:

Disclosure: author holds put options on Research in Motion (RIMM) at time of publication.