In the current market cycle, where inflation is sticky and central banks weigh their next move, some investors need help choosing which type of stocks to bet on. Microcap and small-cap stocks allow earning huge profits in exchange for higher volatility. This has led to the rise of mid-cap stocks to buy now.
However, the fear that your pick suddenly tanks on the news is an ever-present possibility. On the other hand, large-cap and mega-cap stocks offer a higher degree of safety as they generally offer lower volatility, maturity of the business, and predictable rate of returns – at the cost of lower average returns than their smaller-capped cousins.
If you’re looking for a balance of stability and room for growth, then mid-cap stocks may be for you. This reliability makes them appealing to investors unwilling to take on small-cap stocks’ risk and the lower potential yield of large to mega-cap stocks. In the end, it all depends on your risk appetite. And if you find yourself in the middle, it’s fine if it meets your financial goal.
Now, let’s look at some of the mid-cap stocks to buy.
InterDigital (NASDAQ:IDCC) is an R&D company focused on developing technologies that provide a connected and immersive experience in wireless and visual products and services in communication and entertainment. IDCC holds various patents and applications servicing the wireless and consumer electronics industry. The company embraces the emerging cloud computing trend to enhance its robust product portfolio and services.
InterDigital is in a great spot to take advantage of the ongoing trends in the tech sector. This includes the potential licensing of its video compression technology. IDCC also leverages AI to solve wireless and video compression services challenges.
The company also has licensing agreements with Apple, Samsung, and Xiaomi, three of the world’s largest smartphone manufacturers. Lastly, the continuous evolution of TV technology puts IDCC in a great spot to leverage its partnership with existing TV manufacturers like Panasonic for additional licensing opportunities, making it one of the best mid-cap stocks to buy now.
Chemed (NYSE:CHE) specializes in acquiring and operating multiple subsidiaries to enhance shareholder value. It currently operates a palliative and hospice care service under its VITAS segment. The company has built a massive network of physicians, home health aides, registered nurses, etc., for its various clients and their families.
Chemed’s diversified business model means it also provides water restoration, plumbing, and other related services to its residential and commercial clients in its Roto-Rooter segment.
With two solid sectors, CHE can provide potential growth and a recession-proof position. Its admissions in VITAS increased 5.9% YoY. The segment’s net patient revenue also increased by 7.8% from Q22022. While its earnings didn’t meet expectations, analysts are optimistic about CHE and recommend it as a “Strong Buy.”
Sanmina (NASDAQ:SANM) is an original equipment manufacturer (OEM) for the medical, defense, aerospace, industrial and automotive industries. The company runs two integrated businesses consisting of circuit board assembly, test, and order fulfillment via IMS (Integrated Manufacturing Solutions), and production of backplanes & their assembly, cable, fabricated metal, and other industry parts its customers need.
Analysts love SANM and rate the company a “Strong Buy.” Sanmina also delivered a strong performance with a positive outlook for the year. The company has consistently exceeded analyst EPS expectations and is predicted to grow non-GAAP EPS by 35% by the end of its fiscal year on September 30, 2023. With a positive outlook, continuous growth, and expertise in diverse markets, it is a no-brainer why we think SANM is one of the best mid-cap stocks to buy now.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.