problem with using the stacking button is that if i choose a group of 10 LRMS and tell them to attack overseers they will all attack the SAME one :-/
Focus fire is generally a good thing.
When the engagements get that large I turn on stacking and select ships of the same type in appropriate groups, e.g. 1 group of 10 Enforcers for each group of 10 enemy ships. This way you focus fire and can choose appropriate targets for the damage type you do without the amount of firepower you put out being complete overkill for the target.
Be sure to micro you abilities when you have the time but its not good to have you shops abilities being put to best use when your fleet is just randomly targeting enemy ships.
Setting targets and using abilities is generally a higher priority for me but you can also toggle stacking on and off to pull back individual ships when they're severely damaged.
If there are no ships left that need targets assigned or need to fall back I start to micro ships in the main view to try and outflank the enemy or to make them turn to face the wrong way (I find its generally worth sacrificing a frigate if you can get a group of 10+ (arbitrary number) ships to turn around). In addition it can be good to take out the support ships and carriers that generally sit at the back.