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.

American Electric Power is one of the largest electric companies in the U.S. AEP is 95% regulated with generation, transmission, and distribution operations and relatively small gas operations. The company's eight vertically integrated utilities and distribution utilities deliver electricity to more than 5.6 million customers in 11 states in the Midwest and Southeast. AEP has about 31 GW of generating capacity and 252,000 distribution lines. AEP also owns the nation's largest electricity transmission system, with 40,000 system miles. The company had been under strategic review of its energy business, which ended in 2024 with AEP also announcing new leadership. AEP also exited the competitive generating business in 2023, but still has wholesale electricity operations. AEP has one nuclear generating plant, and its owned generation mix is about 38% coal, 8% nuclear, 26% natural gas, and 9% renewables. While still heavily reliant on coal, the company is expanding its use of renewable energy with investments in wind generation. Its current renewable generation capacity is 6,000 MW and the company plans to have renewables and storage providing 50% of its capacity by 2033. Revenues in 2025 were $21.9 billion, with vertical utilities accounting for about 58%. The company's largest vertical utility subsidiary based on revenues is Appalachian Power, which reported $4.2 billion in 2025. AEP has a record of consistent dividend growth and a market cap of about $70 billion.

Last week, we noted that 'one-week insider-sentiment sector data...suddenly suggests caution.' We added '...if an investor is starting to feel that some degree of defensiveness is needed, we'll say that corporate insiders apparently are starting to agree.' And by the end of the week, there was indeed some growing concern that high-flying IT, AI-related, and chip-related stocks might need a timeout. This week, the insider-sentiment data from Vickers Stock Research continues to suggest some degree of caution. We aren't claiming that a correction is imminent, but do believe stocks are vulnerable after the recent big push higher. On a scale where readings above 6.00 are bearish, Vickers' current NYSE One-Week Sell/Buy Ratio is 7.94, up from 5.70 last week; Vickers' Nasdaq One-Week Sell/Buy Ratio is 5.19, up from 4.43 last week; and Vickers' Total One-Week Sell/Buy Ratio is 6.14, up from 4.81 last week. Digging deeper on Vickers' current sector sentiment data, we note that five sectors sport a bullish one-week ratio, four are neutral, and two are bearish (Materials and Information Technology). Of the bearish, the Information Technology ratio has skyrocketed into solidly bearish territory, with a reading of 30.1 compared to 6.8 last week. While that remains below the extreme reading of 173.0 that the sector saw in late April, the consistency of bearish one-week readings for the sector have resulted in an Eight-Week Sell/Buy ratio of 9.2. That makes Information Technology the only sector to record a long-term bearish reading. Still, bright spots remain across the landscape, with bullish One-Week and Eight-Week Sell/Buy readings coming in from the Consumer Staples, Energy, Financial, Healthcare, and Real Estate sectors. This week, analysts at Vickers highlighted insider transactions of interest at Nvidia Corp (NGS: NVDA) and Qorvo Inc. (NGS: QRVO).

Sustainable Impact Investing is gaining traction not only with Argus Research clients but also with the global investment community. As assets have flowed in over the past 40 years, Sustainable Investing has evolved. The discipline, originally known as Socially Responsible Investing, first focused on excluding companies that conducted business in South Africa, or participated in industries such as tobacco, alcohol, and firearms. In time, the list of industries to avoid increased to include soft drinks, fast food, and oil and gas, among numerous others. Performance of initial strategies lagged, and the approach has been modified. Now, instead of merely identifying industries to avoid, the discipline promotes "sustainable" business practices across all industries that can have an "impact" on global issues such as climate, hunger, poverty, disease, shelter, and workers' rights. Given the strategy's focus on leading management practices, we expect the growth curve for Sustainable Investing to again slope upward in the years ahead.