Laurence Dutton
Goldman Sachs analysts listed 25 mid-cap stocks that have quality and growth attributes and are trading at attractive valuations relative to their track records.
Each of these companies trades at a forward 12-month P/E multiple that is lower than its five-year median. They are also expected to have faster EPS growth in 2025, as well as higher sales growth in 2025 and Altman z-scores.
According to a note from Goldman, almost all stocks in the S&P 400 index (SP400) are generating positive net income. Moreover, only 9% of stocks in the S&P 400 index are unprofitable, while more than 35% of those in the Russell 2000 index (IWM) have negative net income over the past 12 months.
“Mid-cap earnings have historically grown at a faster pace than large-cap earnings,” wrote strategist Jenny Ma. “S&P 400 earnings per share growth has outpaced S&P 500 earnings per share growth in roughly two-thirds of the years since 2000, and at a 3 percentage point faster earnings per share CAGR over that period (9% vs. 6%).”
Furthermore, mid-caps have generally outperformed large-caps and small-caps during the 12 months following the Federal Reserve's first rate cut in an easing cycle.
“Current low valuations and our economists’ forecast of continued economic expansion imply a 13% return for the S&P 400 mid-cap index (SP400) over the next 12 months,” Ma said. “This return would rank in the 50th percentile of 12-month returns since 1995.”
These are the mid-cap picks:
- Carlisle Companies Inc. (CSL)
- BioMarin Pharmaceutical Inc. (BMRN)
- Neurocrine Biosciences (NBIX)
- Wing stop (WING)
- Skechers USA (SKX)
- Corporation of Users. (BRKR)
- Real Gold (RGLD)
- New York Times (NYT) Company
- Repligen Corp. (RGEN)
- AppFolio Inc. (APPF)
- Celsius Holdings (CELH)
- Penumbra (PEN)
- Fluor Corporation (FLR)
- Simpson Manufacturing Company (SSD)
- AAON
- Gentex Corp. (GNTX)
- Health Equity Inc. (HQY)
- Cognex Corp. (CGNX)
- Elf Bella (ELF)
- Lattice Semiconductor Corporation (LSCC)
- ExlService Holdings (EXLS)
- Sonoco Products Co. (SON)
- Hexcel Corporation (HXL)
- Visteon Corp. (CV)
- Progynia (PGNY)
