In this article, we will take a look at the 15 most promising mid-cap stocks according to analysts. To see more such companies, go directly to 5 Most Promising Mid-Cap Stocks According to Analysts.
While the majority only focuses on major, large-cap companies that tend to move the market, many, often wise, investors pay close attention to small companies that don’t make headlines but have long-term potential to post strong returns. Investment services company Wespath in a report published in 2020 shared why it invests in small- and mid-cap stocks. The firm said that for more than ten years, Wespath’s U.S. Equity Fund (USEF) has maintained a 15% to 20% overweight to small- and mid-cap stocks when compared with its benchmark, the Russell 3000 index.
The report said that this “bias” was intentional and explained the reason in these words:
“These companies offer a more favorable risk/return profile as compared to large-cap stocks. Wespath believes the small- and mid-cap bias is a long-term benefit to our U.S. Equity Fund supported by favorable historical trends, the influence of active management and an underlying inefficiency in the market’s pricing of these companies.”
Wespath report also said that its rationale of investing in small- and mid-cap stocks is deeply rooted in academic research. The report cited research by Nobel economics laureate Eugene Fama who studied equity returns from 1926 through 1992 and saw that over the long term small- and mid-cap stocks “consistently” outperformed large-cap equities.
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Our Methodology
For this article, we first used the Finviz stock screener to list down mid-cap stocks trading on US stock exchanges whose average analyst price target is above their current stock prices. We sorted the resultant data set in ascending order of market cap and picked the top 15 stocks with solid upside potential based on their average analyst price estimates. With each stock we have mentioned its one-year average price estimate. We took that figure from Yahoo Finance.
Most Promising Mid-Cap Stocks According to Analysts
15. Bilibili Inc. (NASDAQ:BILI)
Number of Hedge Fund Holders: 13
One-Year Price Target: $26.64
Bilibili Inc. (NASDAQ:BILI) is a Chinese online entertainment company. As Chinese stocks rebound amid easing policies in the country, Bilibili Inc. (NASDAQ:BILI) could post a comeback in 2023. For the third quarter, the company posted a loss of 63 cents per share, better than the estimated loss of 65 cents per share. Revenue in the quarter totaled $814.5 million, much better than the consensus estimate of $789.33 million. Bilibili Inc. (NASDAQ:BILI) said that its daily active users in the period reached a whopping 90.3 million in the quarter, which shows a 25% YoY growth. Monthly active users also grew 25% to reach 332.6 million.
14. Agilon Health, inc. (NYSE:AGL)
Number of Hedge Fund Holders: 19
One-Year Price Target: $27.96
Shares of healthcare company agilon health, inc. (NYSE:AGL) have gained a whopping 44% year to date in 2023 through February 15. agilon health, inc. (NYSE:AGL) gained a lot of ground in January after the company upped its preliminary Medicare Advantage outlook to more than ~400,000 members in 2023, up from its previous guidance of about 390,000 members. agilon health, inc. (NYSE:AGL) also reiterated its adjusted EBITDA guidance for 2022 to $2 million to $7 million.
During the third quarter, agilon health, inc. (NYSE:AGL)’s revenue increased by a whopping 51.4% to come in at $695 million. agilon health, inc. (NYSE:AGL)’s Medicare Advantage memberships also increased by 45% to 266,600.
A total of 19 hedge funds had stakes in agilon health, inc. (NYSE:AGL) at the end of the third quarter, up from 12 funds in the previous quarter.
13. TD SYNNEX Corporation (NYSE:SNX)
Number of Hedge Fund Holders: 23
One-Year Price Target: $128.50
California-based IT company TD SYNNEX Corporation (NYSE:SNX) ranks 13th in our list of the most promising mid-cap stocks according to analysts. In January, TD SYNNEX Corporation (NYSE:SNX) declared a dividend of $0.35 per share. This quarterly dividend showed a 16.7% increase from the previous dividend. Dividend yield at the time came in at about 1.4%. The dividend was payable on January 27 to shareholders of record as of January 19.
As of the end of the third quarter of 2022, 23 hedge funds out of the 920 funds tracked by Insider Monkey reported having stakes in TD SYNNEX Corporation (NYSE:SNX). The net worth of these stakes was about $435 million. The biggest stakeholder of TD SYNNEX Corporation (NYSE:SNX) was Gavin M. Abrams’ Abrams Bison Investments which owns a $176 million stake in the company.
12. AGCO Corporation (NYSE:AGCO)
Number of Hedge Fund Holders: 24
One-Year Price Target: $153.38
Agricultural machinery company AGCO Corporation (NYSE:AGCO) ranks 12th in our list of the most promising mid-cap stocks according to analysts. Earlier this month, AGCO Corporation (NYSE:AGCO) posted its fourth quarter results. Adjusted EPS in the quarter came in at $4.47, beating estimates by $0.58. Revenue in the quarter increased by about 24% in the period to come in at $3.9 billion, beating estimates by $160 million.
AGCO Corporation (NYSE:AGCO) said that it expects its net sales in 2023 to come in at around $14.0 billion, versus the consensus estimate of $13.80 billion.
At the end of the third quarter of 2022, 24 hedge funds reported having stakes in AGCO Corporation (NYSE:AGCO), according to Insider Monkey’s database of hedge funds.
11. Qualtrics International Inc. (NASDAQ:XM)
Number of Hedge Fund Holders: 27
One-Year Price Target: $17.75
Experience management software company Qualtrics International Inc. (NASDAQ:XM) shares jumped by a whopping 28% in January after SAP said it was mulling selling its stake in the company. In January, Qualtrics International Inc. (NASDAQ:XM) posted its fourth quarter results that were better than expectations. Qualtrics International Inc. (NASDAQ:XM)’s adjusted EPS in the quarter came in at $0.03, beating estimates by $0.01. Revenue in the quarter jumped about 23% on a YoY basis to reach $389.09 million, beating estimates by $7.97 million. Qualtrics International Inc. (NASDAQ:XM)’ subscription revenue in the period increased by 26% on a YoY basis to total $327.6 million.
At the end of the third quarter of 2022, 27 hedge funds had stakes in Qualtrics International Inc. (NASDAQ:XM). The net worth of these stakes was $589 million.
10. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 28
One-Year Price Target: $271.83
Racetracks and casino company Churchill Downs Incorporated (NASDAQ:CHDN) is one of the most promising mid-cap stocks according to analysts. In January, investment firm JMP Securities started covering Churchill Downs Incorporated (NASDAQ:CHDN) with a Buy rating and a $273 price target.
9. Webster Financial Corporation (NYSE:WBS)
Number of Hedge Fund Holders: 30
One-Year Price Target: $63.95
Connecticut-based commercial banking company Webster Financial Corporation (NYSE:WBS) shares have been performing pretty well in 2023, having gained about 18% year to date through February 15. Webster Financial Corporation (NYSE:WBS) PE ratio still stands under 15. In January, Webster Financial Corporation (NYSE:WBS) declared a quarterly dividend of $0.40 per share. Forward dividend yield at the time came in at 3.38%. The dividend was payable on February 17 to shareholders of record as of February 6.
8. Knight-Swift Transportation Holdings Inc. (NYSE:KNX)
Number of Hedge Fund Holders: 30
One-Year Price Target: $67.21
Shares of Arizona-based transport company Knight-Swift Transportation Holdings Inc. (NYSE:KNX) have gained about 10% over the past year. Earlier this month, Knight-Swift Transportation Holdings Inc. (NYSE:KNX) declared a quarterly dividend of $0.14 per share. The dividend was a 16.7% increase as compared to the previous quarter. The dividend is payable on March 27 to shareholders of record as of March 3.
Despite Knight-Swift Transportation Holdings Inc. (NYSE:KNX)’s weak Q4 results, Wall Street analysts are confident in the long-term growth prospects of the stock. Morgan Stanley analyst Ravi Shanker said after Knight-Swift Transportation Holdings Inc. (NYSE:KNX)’s fourth quarter report that the Q4 turned out to be much tougher than expectations.
“The silver lining is that 4Q/1Q is likely to represent trough earnings and based on the FY23 guide it looks comfortably above the $4 bogey, if not higher,” Shanker noted.
The analyst reiterated a Buy rating on Knight-Swift Transportation Holdings Inc. (NYSE:KNX) and gave an $88 price target.
7. Liberty Global plc (NASDAQ:LBTYA)
Number of Hedge Fund Holders: 31
One-Year Price Target: $28.31
Telecom company Liberty Global plc (NASDAQ:LBTYA) is one of the promising stocks to buy according to analysts based on the stock’s one-year average price target. In November, Liberty Global plc (NASDAQ:LBTYA) posted its third quarter results.
Revenue in the period fell about 7.9% to total $1.75 billion, beating estimates by $20 million.
In 2022, Liberty Global plc (NASDAQ:LBTYA) initiated $1.7 billion worth of share buybacks.
As of the end of the third quarter of 2022, 38 hedge funds tracked by Insider Monkey reported having stakes in Liberty Global plc (NASDAQ:LBTYA). The total value of these stakes was about $1.6 billion. Legendary value investor Seth Klarman’s Baupost Group was the biggest hedge fund stakeholder of Liberty Global plc (NASDAQ:LBTYA) at the end of the third quarter with a $789 million stake.
6. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 32
One-Year Price Target: $27.34
Hydrogen fuel cell company Plug Power Inc. (NASDAQ:PLUG) has solid long-term growth potential, based on its average price target. In December, investment firm UBS analyst Manav Gupta started covering Plug Power Inc. (NASDAQ:PLUG) with a $26 price target.
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Disclosure: None. 15 Most Promising Mid-Cap Stocks According to Analysts is originally published on Insider Monkey.
