This pick list highlights constituents of the Morningstar US Mid Cap Index that we believe offer investors the best risk-adjusted return prospects. The market capitalization range for U.S. mid-caps typically falls between $1 billion and $8 billion and represents 20% of the total capitalization of the U.S. equity market.

Vickers Stock Research, a subsidiary of Argus Research Group, analyzes insider trading and institutional stock ownership. Form 13Fs, which institutions must file to report their holdings, are due 45 days after the end of calendar quarters and have come in for 2Q24. We review 13Fs of major institutional investors, including activists, to see what they are buying and to look for trends. Activist investing is now less about generating a short-term return and more about achieving long-term returns through an active management/investor partnership. The stock-market volatility during 2Q gave those institutional investors a chance to buy a dip. Taking a look at the 13Fs from well-known institutional portfolios, we see that the big guns were busy, either adding new holdings or increasing existing holdings. Buying was across a variety of sectors. Based on Vickers data, the following are select purchases made in 2Q by some high-profile money managers: Chubb (CB) and Ulta Beauty (ULTA) bought by Berkshire Hathaway; Thermo Fisher Scientific (TMO) bought by Citadel; Accenture (ACN), Adobe (ADBE), and Broadcom bought by D.E. Shaw; Shopify (SHOP) and GE Aerospace (GE) bought by Artisan Partners; PayPal (PYPL), Shopify (SHOP), and Tesla (TSLA) bought by Ark Investment Management; and Salesforce (CRM) and Disney (DIS) bought by ValueAct Holdings. We also note one significant sale: Apple Inc. (AAPL) by Berkshire. Turning to sectors, we note that over the past week, insider buying outpaced selling in the Energy sector by a factor of 11.3-times. On the flipside, selling by insiders last week was greatest in Financials, with shares valued at $474 million sold versus less than $2 million bought. This week, analysts at Vickers highlighted insider transactions of interest at Comstock Resources Inc. (NYSE: CRK) and Bank of America Corp. (NYSE: BAC).

U.S. stocks have every reason to be lower today, as a hot job market revealed earlier this morning has led many to believe that a Fed rate cut is now farther away than hoped. But it also means the economy is strong, so in a 'good news may be good news' event, stocks have shaken off earlier weakness and the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite are all slightly higher at midday. Bucking the trend is the Russell 2000, which is lower, along with oil, Bitcoin, and gold.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from global events. As well, the prices of SMID stocks generally are lower than the prices of large-caps. As well, there are long stretches in the record books when SMID stocks have outperformed large-caps. That said, SMID stocks can be risky. The standard deviation for monthly returns was 5.7% for SMID stocks over a 2003-2021 test period, versus 4.3% for large-caps. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record.

U.S. markets were mixed on Friday morning, but are still on track for gains for the week. On the earnings front, FedEx (FDX) rose 7% on an earnings beat, while Nike (NKE) was down about 7% on a weak outlook. The Dow was down 0.5%, the S&P 500 fell 0.1% and the Nasdaq gained less than 0.1%. Crude oil traded above $80 per barrel, while gold fell $16 to $2169 per ounce.

Stocks were little changed on Monday morning as investors weighed new housing market data and awaited a key inflation report - the October PCE price index - later this week. The Commerce Department said that U.S. new home sales fell to an annualized 679,000 in October, down 5.6% from September and well below the Bloomberg consensus forecast of 725,000. However, sales were still up 17.7% from the prior year. The Dow fell 0.1%, the S&P fell 0.1%, and the Nasdaq rose 0.1%. Crude oil rose slightly to $76 per barrel while gold traded near $2011 per ounce.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine, high European inflation or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

For the first time in the month of August, the S&P 500 and the Nasdaq 100 (QQQ) have moved higher for consecutive days -- one of the few positive things we can say about August. The month has seen lower stock prices, higher bond yields, a higher dollar, and cratering crypto markets. This too shall pass. The one positive for stocks is the rapidly increasing bearish market sentiment, especially considering the major index pullbacks have not been close to serious. In a bull market, if sentiment quickly turns sour (and it was overheating quite a bit at the end of July) that generally is a bullish sign for the overall market.

Stocks were mixed on Monday morning as investors awaited new developments in the debt ceiling negotiations in Washington. President Biden and House Speaker McCarthy are expected to meet later today, while Treasury Secretary Janet Yellen reiterated that the U.S. faced a June 1 deadline for avoiding default. In corporate news, Micron Technology fell 3% after the Chinese government banned the import of the company's memory chips into China on cybersecurity grounds. Meta Platforms shares rose 2% despite a $1.3 billion fine from the European Union for privacy violations and the unlawful transfer of EU user data to the U.S. The Dow fell 0.2%, the S&P rose 0.1%, and the Nasdaq rose 0.5%. Crude oil traded near $71.50 per barrel while gold fell $6 to $1976 per ounce.

Small- and mid-cap stocks (SMID) have underperformed large-caps over the past 12 months, but may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine, high European inflation or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky, but diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $15 billion to define a SMID stock.

Monday Tee Up: Fed Rate Decision

Last week, we noted a burst of insider transactions coming out of the now-concluded earnings season. Insiders typically sell stock more often than they buy stock -- but as is the case with most measurements, increased volume brings with it increased significance. The sentiment exposed by the data last week was more-cautious than normal. But, as we wrote, it was 'nowhere near a level that is cause for us to sound an alarm.'

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. SMID stocks can be risky -- and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks fell sharply on Friday morning after Fed Chair Jerome Powell said that the central bank would continue to raise interest rates, and keep them elevated, to prevent inflation from becoming entrenched. He also acknowledged that rate hikes would come at a cost to the American economy. Mr. Powell's speech overshadowed positive inflation data. The Commerce Department said that personal consumption expenditures fell 0.1% month-over-month in July, down from 1.0% growth in June. The core PCE, excluding food and energy, rose 0.1%, slowing from 0.6% a month earlier. The Dow fell 1.7%, the S&P 2.0%, and the Nasdaq 2.7%. Crude oil fell slightly to $92 per barrel, while gold dropped $23 to $1749 per ounce.

Stocks pared early losses on Tuesday morning in another volatile session. Target shares fell more than 3% after the retailer cut its 2Q profit margin guidance amid rising costs, and said that it would offer deep discounts to clear inventory. Shares of other retailers also fell, though Kohl's jumped 9% on news of a buyout offer. The Dow fell 0.1%, the S&P fell 0.1%, and the Nasdaq was flat. Crude oil traded near $119 per barrel, while gold rose $9 to $1853 per ounce.

The overall Insider Index from Vickers Stock Research continues to benefit from recent benign/bullish sentiment among corporate executives, directors, and beneficial owners. The index this week (at -12.17) has further solidified its stance within the neutral zone that runs from +5.00 to -14.00. Transaction volume has started to slow as trading restrictions come into place based on the pending start of earnings season. Yet the current positive sentiment is meaningful at this point in the earnings cycle, as insiders often sell shares in advance of being prohibited from trading for several weeks.

Small- and mid-cap stocks (SMID stocks) have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the fallout from the Russian invasion of Ukraine. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky and large-caps outperformed SMID stocks in 11 of the 19 years in our test period. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 12%-15% of the U.S. stock market's capitalization is comprised of SMID stocks. For our purposes, we use a threshold of $20 billion to define a SMID stock.

This edition features Broadridge's potential, trends in utility companies, new coverage of Datadog, and Eastman, Atlassian, and Comcast.

Stocks fell sharply on Tuesday morning on more signs of accelerating inflation. The Labor Department said that its producer price index rose 9.6% in the 12 months through November, up from 8.8% in October and above the Reuters consensus forecast of 9.2%. The core PPI, excluding food and energy, rose 6.9%, up from 6.3% in October. The Dow fell 0.5%, the S&P 1.2%, and the Nasdaq 1.9%. Crude oil fell 2.5% to $69.50 per barrel, while gold fell $14 to $1774 per ounce.

Small- and mid-cap stocks (SMID stocks) soared in 2019. They have underperformed large-caps over the past 12 months, but still may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are more widely distributed and the domestic service economy recovers. As well, the prices of SMID stocks generally are lower than the prices of large-caps. That said, SMID stocks can be risky. Still, despite the risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. The Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks fell on Tuesday morning on continued concerns about slowing growth and the impact of the Delta variant. The selloff also followed a weaker-than-expected August employment report on Friday morning. Boeing shares dropped more than 2% after Ryanair ended talks for a major purchase of Boeing 737 MAX jets due to a pricing disagreement. The Dow fell 0.8%, the S&P 0.4%, and the Nasdaq 0.1%. Crude oil traded near $68 per barrel, while gold fell $38 to $1796 per ounce.

Many investors are beginning to focus their investment funds on companies that follow sustainable business practices and/or are addressing global impact issues. At Argus, we are a portfolio advisor to a Unit Investment Trust that is built around ESG criteria. We also have launched a separately managed account based on ESG and Impact investing principles. Two times a year, we screen our Universe of Coverage to highlight the stocks that score highest on ESG criteria. We note that Impact Investing addresses issues such as climate change, hunger, poverty, shelter, and clean water. Clean water is not only a personal issue; many industries, including oil, gas, semiconductors, chemicals, electric utilities, food products, beverages and metals and mining, are heavily reliant on clean water. According to the 2030 Water Resources Group, by 2030 "demand for water will be 40 percent higher than it is today, and more than 50 percent higher in the most rapidly developing countries. Historic rates of supply expansion and efficiency improvement will close only a fraction of this gap. Unless local, national and global communities come together and dramatically improve the way we envision and manage water, there will be many more hungry villages and degraded environments-and economic development itself will be put at risk in many countries." The companies in our list this week are working on systems and providing products to reduce global and domestic water risks.

The stock market moved mostly lower last week, as blue chips were battered by Fed commentary while technology stocks outperformed. During Friday's session, the Dow Jones Industrial Average fell 533 points, or 1.58%. The S&P 500 was down 1.91%, and the Nasdaq Composite was down 0.92%. For the week, the DJIA was down 1190 points, or 3.45%, the S&P 500 was down 1.91%, and the Nasdaq Composite was down 0.28%. Year-to-date, the DJIA is up 8.77%, the S&P 500 is up 10.93%, and the Nasdaq Composite is up 8.86%.

This edition features new coverage of DoorDash and Essential Utilities; a closer look at the S&P-IHS Markit merger; Biogen's newly approved Alzheimer's treatment; Snowflake's investor day; and a moat downgrade for Enbridge.

Essential Utilities is a Pennsylvania-based holding company for U.S. water, wastewater, and natural gas distribution utilities. The company's water business serves 3 million people in eight states. Nearly three fourths of its water earnings come from Pennsylvania, primarily suburban Philadelphia. It also has a small market-based water business that provides water and water services to third parties, notably natural gas producers. Its $4.3 billion Peoples Gas acquisition that closed in March 2020 adds 750,000 gas distribution customers in Pennsylvania, West Virginia, and Kentucky.

Stocks rose on Monday morning, led by the Technology sector, as 10-year Treasury yields declined. On the housing front, the National Association of Realtors said that existing home sales fell 6.6% to an annualized rate of 6.22 million in February. The reading was well below the Reuters consensus forecast of 6.5 million, reflecting the impact of rising mortgage rates, low inventory, and cold winter weather. The Dow rose 0.1%, the S&P 0.6%, and the Nasdaq 1.1%. Crude oil traded near $62 per barrel, while gold fell $6 to $1736 per ounce.

The VIX Volatility Index had been averaging in the mid-teens for five years before spiking to an average of 29 in 2020. That average masked the worst readings of the year, at 85 in March 2020 as the U.S. economy started to shut down. The VIX has been pushing down in recent months, enduring speed bumps along the way. Another volatility measure in the S&P 500, the daily rate of change (DRC) in the S&P 500, is also much calmer than in 2020. Low DRC markets generally grind higher, and mainly deliver good bull years. From 2012 to 2019, DRC ran at a low 0.6 and the index averaged 13% capital appreciation. High DRC markets feature a tug-of-war between bulls and bears, with little change in the index at the end of the day. For 2007 to 2011, DRC was 1.1 and the index averaged a 0.3% annual gain. In 2020, DRC ran at a high 1.4%, but it declined in each quarter, with a 0.8% reading for 4Q20. DRC for December was a tame 0.4%. Meanwhile, investors were making money, with the S&P 500 up 12% in 4Q20. January 2021 DRC was 0.8% and February has seen a DRC of 0.6%. Volatility is not at zero, though, and there will be selloffs, as we saw on Tuesday with the Tech stocks. In this environment, we recommend investors focus on high-quality stocks, with strong balance sheets and experienced management.

Small- and mid-cap stocks (SMID stocks) surged in the past quarter. They also have outperformed large-caps over the past 12 months and may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are widely distributed and the economy recovers. As well, the prices of SMID stocks are generally lower than the prices of large-caps. While SMID stocks can be risky, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20%-25% of the U.S. stock market's capitalization is comprised of SMID stocks. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. We note that the Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Small- and mid-cap stocks (SMID stocks) surged in the past quarter. They also have outperformed large-caps over the past 12 months and may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be poised to rebound more quickly once COVID-19 vaccines are widely distributed and the economy recovers. As well, the prices of SMID stocks are generally lower than the prices of large-caps. While SMID stocks can be risky, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20%-25% of the U.S. stock market's capitalization is comprised of SMID stocks. Investors used to use a $2 billion market-cap threshold to define a small-cap stock and a $10 billion threshold for a mid-cap. We note that the Russell 2000 index now includes numerous companies with market capitalizations above $15 billion. For our purposes, we use a threshold of $20 billion to define a SMID stock.

Stocks fell last week, with a final drop on Friday as hopes for a stimulus plan fizzled. The details, rather than the size of the deal, are the sticking points. A troubling initial UE claims report also weighed on sentiment. On Friday, the Dow Jones Industrial Average eked out a win of 47 points, or 0.16%, as DIS shares rallied. The S&P 500 fell 4 points, or 0.13%, and the Nasdaq Composite dropped 28 points or 0.23%. Last week, the Dow was down 0.6%, the S&P 500 was down 1.0%, and the Nasdaq was down 0.7%. For the year-to-date, the DJIA is up 5.3%. The S&P is up 13.4%, and the Nasdaq remains in front with a gain of 38.0%. Over the past 52 weeks, the Dow is up 6.8%, the S&P 500 is up 15.6%, and the Nasdaq is up 41.7%.

Stocks were mixed on Tuesday morning following the first earnings reports from major banks. JPMorgan shares fell despite the company's better-than-expected 3Q earnings and lower loan loss reserves. Citigroup shares also fell after the company reported higher costs and forecast a slower economic recovery in 2021. Net income at Citi fell sharply from the prior year, but came in well above the consensus forecast. The Dow fell 0.3%, the S&P fell 0.3%, and the Nasdaq rose 0.3%. Crude oil traded near $40 per barrel, while gold fell $33 to $1896 per ounce.

Stocks were mixed on Tuesday morning following the first earnings reports from major banks. JPMorgan shares fell despite the company's better-than-expected 3Q earnings and lower loan loss reserves. Citigroup shares also fell after the company reported higher costs and forecast a slower economic recovery in 2021. Net income at Citi fell sharply from the prior year, but came in well above the consensus forecast. The Dow fell 0.3%, the S&P fell 0.3%, and the Nasdaq rose 0.3%. Crude oil traded near $40 per barrel, while gold fell $33 to $1896 per ounce.

Many investors are beginning to focus their investment funds on companies that follow sustainable business practices and/or are addressing global impact issues. At Argus, we are a portfolio advisor to a Unit Investment Trust that is built around ESG criteria. We also have launched a separately managed account based on ESG and Impact investing principles. Two times a year, we screen our Universe of Coverage to highlight the stocks that score highest on ESG criteria. We note that Impact Investing addresses issues such as climate change, hunger, poverty, shelter and clean water. Clean water is not only a personal issue; many industries, including oil, gas, semiconductors, chemicals, electric utilities, food products, beverages and metals and mining, are heavily reliant on clean water. According to the 2030 Water Resources Group, by 2030 "demand for water will be 40 percent higher than it is today, and more than 50 percent higher in the most rapidly developing countries. Historic rates of supply expansion and efficiency improvement will close only a fraction of this gap. Unless local, national and global communities come together and dramatically improve the way we envision and manage water, there will be many more hungry villages and degraded environments -- and economic development itself will be put at risk in many countries." The companies in our list this week are working on systems and providing products to reduce global and domestic water risks.

Many investors are beginning to focus their investment funds on companies that follow sustainable business practices and/or are addressing global impact issues. At Argus, we are a portfolio advisor to a Unit Investment Trust that is built around ESG criteria. We also have launched a separately managed account based on ESG and Impact investing principles. Two times a year, we screen our Universe of Coverage to highlight the stocks that score highest on ESG criteria. We note that Impact Investing addresses issues such as climate change, hunger, poverty, shelter and clean water. Clean water is not only a personal issue; many industries, including oil, gas, semiconductors, chemicals, electric utilities, food products, beverages and metals and mining, are heavily reliant on clean water. According to the 2030 Water Resources Group, by 2030 "demand for water will be 40 percent higher than it is today, and more than 50 percent higher in the most rapidly developing countries. Historic rates of supply expansion and efficiency improvement will close only a fraction of this gap. Unless local, national and global communities come together and dramatically improve the way we envision and manage water, there will be many more hungry villages and degraded environments -- and economic development itself will be put at risk in many countries." The companies in our list this week are working on systems and providing products to reduce global and domestic water risks.

Stocks were mixed on Tuesday morning after paring sharper early losses, as investors continued to weigh rising coronavirus cases against signs of progress on new therapies and vaccines. Novavax shares surged nearly 30% after the U.S. government awarded the company $1.6 billion to cover the testing and manufacturing of a potential vaccine, while Regeneron rose more than 4% after receiving a $450 million government contract for the development of a possible antiviral treatment. The Dow fell 0.7%, the S&P was flat, and the Nasdaq rose 0.7%. Crude oil traded near $41 per barrel, while gold rose $14 to $1808 per ounce.

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, many smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. SP despite risks associated with smaller-cap stocks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 15%-20% of the U.S. stock market's capitalization is comprised of small- and mid-cap stocks.

Large-caps have outperformed over the past 12 months, but small- and mid-caps may be in a better position to generate market-beating returns going forward. For one thing, many smaller companies often are more focused on domestic operations and may not be exposed to the global economic uncertainty caused by the coronavirus. For another, prior to COVID-19, the long-term record favored small-caps over large-caps. From 2003-2019, the Russell 2000 Index had climbed 282%, compared to an advance of 233% for the Russell 1000 Index. In 2020, a relatively weak performance by the Russell 2000 Index has brought the measures more in line for the year-to-date. SP despite risks associated with smaller-cap stocks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 15%-20% of the U.S. stock market's capitalization is comprised of small- and mid-cap stocks.