In this article, we discuss the 15 best mid-cap stocks for 2021. If you want to skip our detailed analysis of these stocks, go directly to the 5 Best Mid-Cap Stocks for 2021.
Mid-cap stocks are considered in the middle of small-cap and large-cap stocks. While mid-cap (i.e. mid-capitalization) is generally used to designate companies with a market capitalization between $2 billion and $10 billion, these numbers are subject to change as all stock valuations change over time
One index that tracks mid-cap stocks based in the U.S. is S&P MidCap 400. This index consists of 400 stocks. As of July 30, 2021, the median total market capitalization in the index is at $5.627 billion with the smallest at $1.375 billion and the largest at $18.755 billion.
In the traditional risk vs. reward analysis, small-cap stocks are considered to have the best growth potential than mid-cap and large-cap stocks. However, this growth comes with greater risk. Generally, mid-cap stocks are considered to have a proven track record of profitability while having less volatility during tougher market conditions compared to small-cap stocks. On the other hand, large-cap stocks are seen as less risky albeit with less growth potential compared to mid-cap stocks. Because of this reason, mid-cap stocks can be used in portfolio diversification.
We can see the idea of diversification when comparing S&P MidCap 400 with S&P 500, the S&P index for large-cap companies. Not surprisingly, technology stocks represent 27.2% of all stocks in the S&P 500. In contrast, no sector has 20% or more representation in S&P MidCap 400. Also, industrials and materials sectors account for a combined 26.6% of all midcap stocks while they only account for 11% of large-cap stocks. So, significant differences exist between large-cap and mid-cap stocks when it comes to sectoral breakdown.
Some big-name midcap stocks include Dolby Laboratories, Inc. (NYSE: DLB) known for its audio and video technologies such as Dolby Vision, Five Below, Inc. (NASDAQ: FIVE), the well-known discount store chain, and The Mosaic Company (NYSE: MOS) known for its production of potash and phosphate fertilizers.
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Our Methodology
Regarding the methodology used in this article, the minimum and maximum valuations in S&P MidCap 400 were used to identify mid-cap stocks. Moreover, the ranking of a given stock in this list is based on the number of hedge fund holdings in that stock as of the end of the second quarter of 2021, based on our data of 873 hedge funds.
15 Best MidCap Stocks For 2021
15. Upwork Inc. (NASDAQ: UPWK)
Number of Hedge Fund Holders: 26
Upwork Inc. (NASDAQ: UPWK) is a California-based online freelancer marketplace for freelancers and businesses to conduct business. It is the world’s largest freelancer marketplace. It is ranked fifteenth on our list of 15 best mid-cap stocks for 2021. The stock has returned over 170.68% to investors over the course of the past year.
On July 29, Upwork Inc. (NASDAQ: UPWK) posted earnings for the second quarter of 2021, reporting earnings per share of -$0.13, missing estimates by $0.04. The revenue over the period was around $124 million, up 41.87% year-over-year.
At the end of the second quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $428 million in Upwork Inc. (NASDAQ: UPWK).
Out of the hedge funds tracked by Insider Monkey, SRS Investment Management has the most valuable stake in Upwork Inc. (NASDAQ: UPWK) as of the end of second quarter of 2021, worth close to $117 million, comprising 1.74% of its 13F portfolio.
On July 30, MKM Partners boosted its price target on Upwork Inc. (NASDAQ: UPWK) to $65 from $58 and maintained its Buy rating, noting that the company has had and continues to have partnerships with large firms and clients.
Just like The Mosaic Company (NYSE: MOS), Five Below, Inc. (NASDAQ: FIVE), and Ambarella, Inc. (NASDAQ: AMBA), Upwork Inc. (NASDAQ: UPWK) is one of the best mid-cap stocks for 2021.
14. Semtech Corporation (NASDAQ: SMTC)
Number of Hedge Fund Holders: 28
Semtech Corporation (NASDAQ: SMTC) is a California-based semiconductor company, supplying analog and mixed-signal semiconductors and advanced algorithms. Its products include LoRa, a long-range networking tech used in the field of the Internet of Things (IoT). It is ranked fourteenth on our list of 15 best mid-cap stocks for 2021. The stock has returned over 3.31% to investors over the course of the past year.
On June 2, Semtech Corporation (NASDAQ: SMTC) posted earnings for the first quarter of 2021, reporting earnings per share of $0.36, beating estimates by $0.05. The revenue over the period was around $170 million, up 28.39% year-over-year.
At the end of the second quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $376 million in Semtech Corporation (NASDAQ: SMTC), up from 21 the preceding quarter worth $210 million.
Out of the hedge funds tracked by Insider Monkey, billionaire Ken Fisher’s Fisher Asset Management has the most valuable position in Semtech Corporation (NASDAQ: SMTC) as of the end of the second quarter of 2021, worth close to $90 million, comprising 0.05% of its 13F portfolio.
During the second quarter of 2021, Fisher Asset Management increased its stake in Semtech Corporation (NASDAQ: SMTC) by 12%. Israel Englander’s Millennium Management increased its stake by 232%. Millennium Management’s stake is worth $84 million as of the end of the second quarter of 2021.
13. LendingTree, Inc. (NASDAQ: TREE)
Number of Hedge Fund Holders: 30
LendingTree, Inc. (NASDAQ: TREE) is a financial services company offering third-party services for borrowers to shop and compare different credit terms. It is ranked thirteenth on our list of 15 best mid-cap stocks for 2021. The stock has returned about -46.55% to investors over the course of the past year.
On July 29, LendingTree, Inc. (NASDAQ: TREE) posted earnings for the second quarter of 2021, reporting earnings per share of $0.48, beating estimates by $1.14. The revenue over the period was around $270.01 million, up 46.49% year-over-year.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $347 million in LendingTree, Inc. (NASDAQ: TREE), up from 25 the preceding quarter worth $568 million.
Out of the hedge funds tracked by Insider Monkey, billionaire Ken Griffin’s Citadel Investment Group increased its stake in LendingTree, Inc. (NASDAQ: TREE) by 45% during the second quarter of 2021. This stake was worth $73 million as of the end of the second quarter of 2021.
Just like The Mosaic Company (NYSE: MOS), Five Below, Inc. (NASDAQ: FIVE), and SolarEdge Technologies, Inc. (NASDAQ: SEDG), LendingTree, Inc. (NASDAQ: TREE) is one of the best mid-cap stocks for 2021.
In its Q1 2021 investor letter, Headwaters Capital, an investment management firm, mentioned LendingTree, Inc. (NASDAQ: TREE). Here is what the firm had to say:
“LendingTree is an online marketplace for consumer financial products such as mortgages, credit cards, personal loans and insurance. TREE’s marketplaces connect consumers looking for financial products with lenders and insurance companies, effectively serving as an outsourced marketing partner for lenders and insurance providers. TREE’s results were negatively impacted by ongoing stimulus payments that have served to improve the health of consumer balance sheets and reduce the demand for lending products, specifically credit cards and personal loans. As a result of lower consumer demand for loans, lenders have reined in their marketing budgets, which has translated into lower revenue for TREE. While it is difficult to predict when consumer demand and, consequently, lender marketing budgets will rebound, I do expect both to rebound to pre-COVID levels. Additionally, TREE’s CEO is heavily incentivized to improve performance at the business: he has foregone a salary and has instead accepted a performance-based options grant that can only be exercised once the stock price reaches a minimum hurdle price of $432 (+108% from the current share price). The CEO also has a 16% ownership stake in the Company.”
12. Coty Inc. (NYSE: COTY)
Number of Hedge Fund Holders: 30
Coty Inc. (NYSE: COTY) is an American beauty company, developing and manufacturing skincare, haircare, cosmetics products as well as fragrances. It is ranked twelfth on our list of 15 best mid-cap stocks for 2021. The stock has returned over 106.84% to investors over the course of the past year.
On May 10, Coty Inc. (NYSE: COTY) posted earnings for the first quarter of 2021, reporting earnings per share of -$0.02, missing estimates by $0.03. The revenue over the period was around $1.03 billion, down 32.74% year-over-year.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $382 million in Coty Inc. (NYSE: COTY), up from 25 the preceding quarter worth $263 million.
Out of the hedge funds tracked by Insider Monkey, Melvin Capital has the most valuable stake in Coty Inc. (NYSE: COTY) as of the end of the second quarter of 2021, worth close to $93 million, comprising 0.53% of its 13F portfolio.
11. Everest Re Group, Ltd. (NYSE: RE)
Number of Hedge Fund Holders: 30
Everest Re Group, Ltd. (NYSE: RE) is a holding company providing reinsurance and insurance to various clients across the world. It is ranked eleventh on our list of 15 best mid-cap stocks for 2021. The stock has returned over 25.69% to investors over the course of the past year.
On July 28, Everest Re Group, Ltd. (NYSE: RE) posted earnings for the second quarter of 2021, reporting earnings per share of $14.63, beating estimates by $5.99. The revenue over the period was around $2.56 billion, up 26.81% year-over-year.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $686 million in Everest Re Group, Ltd. (NYSE: RE).
Out of the hedge funds tracked by Insider Monkey, AQR Capital Management has the most valuable stake in Everest Re Group, Ltd. (NYSE: RE) as of the end of the second quarter of 2021, worth close to $181 million, comprising 0.31% of its 13F portfolio. During the second quarter of 2021, billionaire Jim Simons’s Renaissance Technologies increased its stake in Everest Re Group, Ltd. (NYSE: RE) by 93%. This follows a 345% increase in stake during the first quarter of 2021.
On August 16, Wolfe Research gave an Outperform rating to Everest Re Group, Ltd. (NYSE: RE) with a price target of $330, citing a favorable risk/reward dynamic.
In its Q1 2021 investor letter, Miller/Howard Investments, an investment management firm, mentioned Everest Re Group, Ltd. (NYSE: RE). Here is what the firm had to say:
“We bought two new financials this quarter (including), Everest Re (RE). Both were selling at a discount to book value and should benefit from the improving economy, in our opinion.”
10. Dolby Laboratories, Inc. (NYSE: DLB)
Number of Hedge Fund Holders: 31
Dolby Laboratories, Inc. (NYSE: DLB) is an American company developing technologies and products for mainly the entertainment and consumer electronics industries. These products include audio noise reduction and high dynamic range (HDR) video technologies. It is ranked tenth on our list of 15 best mid-cap stocks for 2021. The stock has returned over 43.01% to investors over the course of the past year.
On July 29, Dolby Laboratories, Inc. (NYSE: DLB) posted earnings for the second quarter of 2021, reporting earnings per share of $0.71, beating estimates by $0.23. The revenue over the period was around $287 million, up 16.16% year-over-year.
At the end of the second quarter of 2021, 31 hedge funds in the database of Insider Monkey held stakes worth $748 million in Dolby Laboratories, Inc. (NYSE: DLB).
Out of the hedge funds tracked by Insider Monkey, SoMa Equity Partners has the most valuable stake in Dolby Laboratories, Inc. (NYSE: DLB) as of the end of the second quarter of 2021, worth close to $226 million, comprising 4.76% of its 13F portfolio.
On August 2, Barrington boosted its rating on Dolby Laboratories, Inc. (NYSE: DLB) to Outperform from Market Perform and gave a price target of $115, noting that the company will benefit from the consumer demand for better audio and visual experience.
Just like The Mosaic Company (NYSE: MOS), Ambarella, Inc. (NASDAQ: AMBA), and Five Below, Inc. (NASDAQ: FIVE), Dolby Laboratories, Inc. (NYSE: DLB) is one of the best mid-cap stocks for 2021.
9. AECOM (NYSE: ACM)
Number of Hedge Fund Holders: 32
AECOM (NYSE: ACM) is an American engineering and infrastructure consulting firm. It is ranked ninth on our list of 15 best mid-cap stocks for 2021. The stock has returned over 62.07% to investors over the course of the past year.
On August 9, AECOM (NYSE: ACM) posted earnings for the second quarter of 2021, reporting earnings per share of $0.73, breaking even with the estimates. The revenue over the period was around $3.41 billion, up 6.86% year-over-year.
At the end of the second quarter of 2021, 32 hedge funds in the database of Insider Monkey held stakes worth $791 million in AECOM (NYSE: ACM).
Out of the hedge funds tracked by Insider Monkey, Starboard Value LP has the most valuable stake in AECOM (NYSE: ACM) as of the end of the second quarter of 2021, worth close to $470 million, comprising 9.24% of its 13F portfolio.
During the second quarter of 2021, billionaire Ken Griffin’s Citadel Investment Group increased its stake in AECOM (NYSE: ACM) by 3%, bringing the value of its stake to around $86 million, as of the end of the second quarter. This increase follows an 8% increase in stake during the first quarter.
As the $3.5 trillion infrastructure bill makes it way through the Congress, AECOM (NYSE: ACM) has a unique position as a big infrastructure management company. With around $1.05 billion in cash and cash-equivalents and successful operations in the United States and the EMEA region, AECOM (NYSE: ACM) is highly likely to benefit from the infrastructure bill.
8. Syneos Health, Inc. (NASDAQ: SYNH)
Number of Hedge Fund Holders: 33
Syneos Health, Inc. (NASDAQ: SYNH) is a North Carolina-based healthcare company offering contract research services to biotechnology companies in the form of patient and investigator recruitment as well as clinical development services in Phases I through IV among other services. It is ranked eighth on our list of 15 best mid-cap stocks for 2021. The stock has returned over 50.76% to investors over the course of the past year.
On August 9, Syneos Health, Inc. (NASDAQ: SYNH) posted earnings for the second quarter of 2021, reporting earnings per share of $0.97, beating estimates by $0.02. The revenue over the period was around $1.28 billion, up 26.57% year-over-year.
At the end of the second quarter of 2021, 33 hedge funds in the database of Insider Monkey held stakes worth $670 million in Syneos Health, Inc. (NASDAQ: SYNH), up from 28 the preceding quarter worth $460 million.
On August 4, Credit Suisse gave an Outperform rating to Syneos Health, Inc. (NASDAQ: SYNH) with a price target of $96, preserving its rating and price target.
7. Plug Power Inc. (NASDAQ: PLUG)
Number of Hedge Fund Holders: 34
Plug Power Inc. (NASDAQ: PLUG) is an American alternative energy technology company, developing hydrogen fuel cells to replace conventional batteries. It is ranked seventh on our list of 15 best mid-cap stocks for 2021. The stock has returned over 77.25% to investors over the course of the past year.
On August 5, Plug Power Inc. (NASDAQ: PLUG) posted earnings for the second quarter of 2021, reporting earnings per share of -$0.18, missing estimates by $0.11. The revenue over the period was around $125 million, up 82.98% year-over-year.
At the end of the second quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $878 million in Plug Power Inc. (NASDAQ: PLUG), up from 25 the preceding quarter worth $613 million.
Out of the hedge funds tracked by Insider Monkey, D.E. Shaw has the most valuable stake in Plug Power Inc. (NASDAQ: PLUG) as of the end of the second quarter of 2021, worth close to $507 million, comprising 0.43% of its 13F portfolio. D. E. Shaw increased its stake by 23% during the second quarter of 2021.
Plug Power Inc. (NASDAQ: PLUG) is one of the best mid-cap stocks for 2021, along with The Mosaic Company (NYSE: MOS), Ambarella, Inc. (NASDAQ: AMBA), and Five Below, Inc. (NASDAQ: FIVE).
6. Skechers U.S.A., Inc. (NYSE: SKX)
Number of Hedge Fund Holders: 35
Skechers U.S.A., Inc. (NYSE: SKX) is the third-largest footwear company in the United States. It is ranked sixth on our list of 15 best mid-cap stocks for 2021. The stock has returned over 71.86% to investors over the course of the past year.
On July 22, Skechers U.S.A., Inc. (NYSE: SKX) posted earnings for the second quarter of 2021, reporting earnings per share of $0.88, beating estimates by $0.38. The revenue over the period was around $1.66 billion, up 127.26% year-over-year.
At the end of the second quarter of 2021, 35 hedge funds in the database of Insider Monkey held stakes worth $773 million in Skechers U.S.A., Inc. (NYSE: SKX), up from 29 the preceding quarter worth $532 million.
Out of the hedge funds tracked by Insider Monkey, Pzena Investment Management has the most valuable stake in Skechers U.S.A., Inc. (NYSE: SKX) as of the end of the second quarter of 2021, worth close to $254 million, comprising 0.98% of its 13F portfolio.
On July 23, B. Riley boosted its price target on Skechers U.S.A., Inc. (NYSE: SKX) to $61 from $51 and kept its Buy rating, noting that the company had a strong Q2 performance and can benefit from the reopening of the world economy.
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Disclosure: None. 15 Best Mid-Cap Stocks for 2021 is originally published on Insider Monkey.
