Starting Over - Spring 2026

Let’s start over and build another mid-cap value portfolio from scratch.

I would still rather own a 4% yielding 2-year US Treasury, but if you must own stocks let’s find the 20 best. The portfolio below is a rough draft of where we are going. If you pointed a gun at my head (please don’t do that), this is the portfolio I would own right now.

In very broad terms, with consumer confidence at all-time low, it is not surprising that my portfolio is over-weighted in consumer durables and staples. It is difficult to find industrials, or technology, at attractive valuations.

We will start with the materials sector and work our way through each of the 11 sectors as defined by Morningstar.

My goal is too provide an educational framework that individuals can use to build an actual mid-cap value portfolio.

A mid-cap portfolio should have a MEDIAN market cap in the range of $5-$10 billion. The sketch below might have a few too many large caps, but hopefully we can find a few more mid-caps as we explore each sector.

We are looking for companies with interesting and understandable upside potential, and a below average level of downside risk.

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Temporary Portfolio Sketch:

1. Nutrien - NTR - the farm cycle will get better, no gold right now

2. Tractor Supply - TSCO - still room to grow geographically

3. Brunswick - BC - the dominant boat builder, think fishing

4. Shake Shack - SHAK - or maybe First Watch

5. Mohawk - MHK - carpet and flooring. nibbling at home construction

6. AJ Gallagher - AJG - world’s best industry - insurance brokerage

7. Lineage - LINE - cold warehouse over-capacity is declining, decent yield

8. Sun Communities - SUI - RV’s and manufactured housing parks, sold the marina business

9. Cubesmart - CUBE - storage industry is consolidating, decent yield

10. Nexstar - NXST - silly anti-trust concerns, maybe Magnite

11. Kinder-Morgan - KMI - needed pipeline deregulation coming fast, decent yield

12. Middleby - MIDD - restaurant capital spending will improve

13. Zebra Technology - ZBRA - tracking everything with RFID and paper tags

14. Sysco - SYY - recent beverage acquisition is interesting, with significant synergies

15. Scott’s Miracle-Gro - SMG - dominates the garden store

16. Constellation Brands - STZ - lots of beaten up beverage stocks, Mexican beer

17. Revvity - RVTY - lots of beaten up healthcare stocks, lab equipment

18. American Water Works - AWK - lots of muni water systems to acquire

19. Paychex - PAYX - small business will make a comeback, decent yield

20. Core & Main - CNM - we all need water, water infrastructure

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The sector weights are a little different for mid-cap value funds, compared to the S&P 500

1. Materials - sector weight - 5% - my weight 5% - Nutrien

2. Consumer Cyclical - sector weight 10% - my weight 20% - Tractor Supply, Brunswick, Shake Shack, Mohawk

3. Financial Services - 15% - my weight - 5% - AJ Gallagher

4. Real Estate - 5% - my weight - 15% - Lineage, Sun Communities, Cubesmart

5. Communications - 5%. - my weight - 5% - Nexstar

6. Energy - 10% - my weight - 5% - Kinder Morgan

7. Industrials - 15% - my weight 5% - Middleby

8. Technology - 15% - my weight - 5% - Zebra Tech

9. Consumer Staples - 5% - my weight - 15% - Sysco, Constellation, Scott’s Miracle-Gro

10. Healthcare - 10% - my weight - 5% - Revvity

11. Utilities - 5% - my weight 5%, American Water

12. Other - my weight 10% - Paychex, Core & Main

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a. Restaurants

1. First Watch

2. Wendy’s

3. Jack in the Box

4. Shake Shack

5. McDonald’s

6. Domino’s

7. Restaurant Brands

8. Cheesecake Factory

9. Bloomin Brands

10. Portillo’s

b. Consumer

1. Tyson

2. Clorox

3. Kimberly Clark

4. JM Smucker

5. Ingredion

6. Lamb Weston

7. Marzetti’s

8. Campbell’s

9. Kraft-Heinz

10. ConAgra

11. McCormack

12. Hormel

13. Scott’s Miracle-Gro

c. Technology

1. Adobe

2. Roper

3. Kyndryl

4. Trade Desk

5. WEX

6. Logitech

7. Toast

d. Beverages

1. Keurig Dr Pepper

2. Pepsi

3. Mondelez

4. Diageo

5. Constellation

6. Brown-Forman

7. Molson Coors

8. National Beverage

9. MGP Ingredients

10. Boston Beer

e. REIT’s

1. Cubesmart

2. Lineage

3. Americold

4. Starwood

5. Rayonier

6. Sun Communities

7. Alexandria

8. Weyerhauser

9. Host

f. Financials

1. AJ Gallagher

2. Moelis

3. Marsh

4. Kemper

5. Lazard

g. Other

1. Ball Corp.

2. Paychex

3. Sysco

4. Copart

5. LKQ

6. AECOM

7. Ashland

8. Lindsay

9. McGraw Hill

10. Coty

11. OI Glass

12. Silgan

13. MillerKnoll

14. Core & Main

15. Willscott

16. SunOpta

h. Healthcare

1. Avantor

2. Zoetis

3. Zimmer

4. Medtronic

5. Revitty

6. Baxter

7. Henry Schein

8. Abbott

9. Prestige Consumer

i. Consumer Durable

1. Harly Davidson

2. Carmax

3. Gentex

4. Tractor Supply

5. Wyndam

6. Choice Hotels

7. Vail Resorts

8. Norwegian Cruise

9. Thor Industries

10. Polaris

j. Building

1. PPG

2. Mohawk

3. Whirlpool

4. Pulte

5. UFP Industries

6. Stepan

7. Louisiana-Pacific

j. Materials

1. Mosaic

2. Alamos Gold

3. Nutrien

4. HB Fuller

5. International Paper

6. Knife River

k. Industrials

1. Zebra Tech

2. Air Products

3. PACCAR

4. International Flavors

5. Veralto (Danaher spin)

6. Hillman

l. Utilities

1. American Water

2. Avista

m. Retail

1. Tractor Supply

2. Home Depot

3. Etsy

n. Apparel

1. Columbia

2. Oxford

3. Nike

o. Energy

1. Kinder Morgan

2. ONEOK

p. Communications

1. Magnite

2. Nexstar

3. Comcast

4. Versant (Comcast spin)

q. Gambling

1. Red Rock

2. Churchill

3. Flutter