Andrew Allentuck

Monday, May 6, 2002


Standard & Poor's Mid Cap 400 Guide 2002 edition
McGraw-Hill, 2002
ISBN 0-07138069-8

They're all here, the companies with market caps too low to make it into the megacap Standard & Poor's 500 and too big to qualify for the racy world of small caps. With average caps of US$2.2 billion, these are the businesses that may wind up in the 500 in decades to come.

Included in this book of companies little known to most investors is Outback Steakhouse, Inc., operator not only of the Australian theme eateries, but also restaurants with Italian themes. With an 18.8 per cent return on equity in 2000 and a p/e south of 20, according to the guide, it could be a good investment. Another midcap, International Speedway Corp., which runs stock car races, had an RoE of just 5.4 per cent in 2000, yet it's p/e ration was up to 57 in that year. Go figure.

The S&P 400 Mid Cap Guide offers buy/sell/hold recommendations on its stocks, detailed info. on address and phone, detailed financial statements, rankings by dividend, rapid growth, fast rising dividends, and earnings consistency.

The investor who wants to buy U.S. mid-caps has to have this book. And given the extent to which U.S. large caps have been discredited by questionable accounting, it may not hurt to shop in a market in which firms are usually too small to be anything but transparent.