- Mid-cap stocks offer a unique opportunity to investors for long-term growth.
- These stocks can be a good option for those looking to diversify or balance their portfolio.
- Mid-cap stocks are usually fast-growing, profitable, and stable.
Although mid-cap stocks constitute a significant part of the stock market, some investors tend to overlook them, given that most of their focus remains on either fast-growing or well-established firms that they can count on for stability and security, and growth.
However, mid-cap stocks offer a unique opportunity to investors as they are neither too big nor too small that can fit in their budget for profitability and growth. These stocks can be an ideal option for those looking to diversify or balance their portfolio with a mix of growth and value shares.
But which are midcap stocks? One best way to identify them, as the name suggests, is the size of their market capitalization, which is neither small nor large. Companies that are worth US$2-10 billion are generally considered mid-cap or medium-sized companies. These businesses are usually fast-growing, profitable, and stable that have outgrown their small-cap status.
Here are three mid-cap stocks worth considering.
CMC Materials Inc (NASDAQ:CCMP)
This Illinois-based company is a supplier of polishing pads and chemicals used in the semiconductor industry. Although relatively small in terms of market capitalization at around US$4.5 billion, CMC has been making considerable progress over the years.
Its products are used in making advanced circuit devices that are small and faster. Its products are also used in the gold industry, one of the reasons why it has been able to maintain sustained growth, considering the chip industry can be volatile sometimes.
CMC had signed an agreement last month to acquire Nevada-based International Test Solutions, Inc. (ITS) for US$125 million. The acquisition is expected to boost its semiconductor testing abilities. The stock was trading at around US$186 at 4 pm ET on Friday, April 1.
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Stitch Fix (NASDAQ:SFIX)
This California-based internet firm offers styling services for men and women and has seen rapid growth over the past few years. It uses AI technology for design references. It provides a wide range of products for women and men such as shoes, skirts, blouses, handbags, and jewelry. Besides, it runs a shipment service called A FIX, through which customers can select and place orders.
Although the apparel industry has taken a hit due to the covid pandemic, Stitch Fix managed to emerge unscathed. Stitch Fix has a market cap of around US$3.3 billion. SFIX stock was trading at around US$49 at 4.40 pm ET on Thursday, April 1.
AMC Entertainment Holdings Inc. (NYSE:AMC)
AMC Entertainment Inc. operates one of the world’s largest theatre networks, spanning the US, Europe, and the Middle East. Its high-end theatre halls, equipped with power recliners, bars, and dine-in facilities, are aimed at providing top-class services to its customers. Although the theatre business has been disrupted due to covid, it is expected to bounce back in the coming months. AMC has opened almost all its theatre facilities in March in the US.
In the quarter ended December 31, 2020, AMC had reported a net loss of US$946.1 million compared to US$13.5 million in the corresponding period of 2019. AMC has a market cap of US$4.2 billion. The AMC stock was trading at US$9.36 at 5 pm ET on Thursday, April 1.