Peery Says Mid Cap Outperforming Due to M&A

Midcaps Are The "Next Leg Up"

Brian Peery, Portfolio Manager, Hennessy Funds discusses Hennessy’s quantitative fund management, opportunities in mid cap, and where opportunities to outperform exist in today’s market environment.

Peery thinks mid-cap stocks are the next leg up once the market finishes correcting and heads north again. Equity bulls have been selling out of large cap stocks and piling into small cap over the last year. But if Peery’s calculations are right, mid cap stocks are on deck to hit.

“We think the market has overlooked the space,” he tells RIA Channel CEO, Julie Cooling. “We are very excited about it.”

In the video, he discusses how their Cornerstone Mid Cap 30 (HFMDX) fund selects its current crop of 29 long-only U.S. focused companies out of a universe of more than 1,000 companies. They’re holding for roughly a year and reposition the portfolio accordingly.

Check out the funds top five holdings and their performance over the last 12 months compared to the Dow and Russell Mid Cap (IWR). Investors who just owned those stocks alone would have done incredibly well last year.

DJIA: +17.83%

IWR: +14.81%

Sanmina Corp (SANM): +44.17%

Huntsman Company (HUN): +86.29%

Kennametal (KMT): +60.6%

The Brinks Co. (BCO): +106.01%

ON Semiconductor (ON): +69.9%