This is the third of a three-part series featuring lists of top stock picks among analysts working for brokerage firms. Part 1 screens large-cap stocks, led by Nvidia Corp. Part 2 screens small-cap stocks.
When investors think about whether to increase their exposure beyond the big companies that grab most of the headlines in the financial media, they are likely to look at small-cap stocks first. After all, the sky’s the limit. Meanwhile, midcap companies can get lost in the shuffle.
But it is reasonable to consider medium-size companies that “have proven out their business model but have a lot of room to run,” according to Josh West, who manages the highly rated Buffalo Mid Cap Fund BUFMX.
West recently discussed seven midcap tech stocks that he favors.
As discussed in Part 2 of this series, midcaps as a group are trading at relatively low price-to-earnings ratios when compared with the large-cap S&P 500 — screened in Part 1 — and a bit below their historical averages.
| Index | Return since end of 2021 | Forward P/E | Current P/E to 5-year average | Current P/E to 10-year average | Current P/E to 15-year average |
| S&P Small Cap 600 | -3% | 14.3 | 98% | 94% | 98% |
| S&P Mid Cap 400 | 1% | 14.5 | 96% | 94% | 98% |
| S&P 500 | 3% | 19.6 | 102% | 109% | 121% |
| Source: FactSet | |||||
To screen midcaps, we started with the S&P Mid Cap 400 Index
MID
and cut the list to 369 companies covered by at least five analysts polled by FactSet. Then we reduced the list to 83 companies with buy or equivalent ratings from at least 75% of the analysts.
Among those 83, here are the 20 with the most upside potential over the next year, indicated by consensus price targets:
| Company | Ticker | Share buy ratings | Dec. 22 price | Consensus price target | Implied upside potential | Forward P/E |
| Lantheus Holdings Inc. |
LNTH, |
91% | $59.59 | $96.64 | 62% | 9.7 |
| R1 RCM Inc. |
RCM, |
94% | $10.64 | $17.25 | 62% | 33.7 |
| Jazz Pharmaceuticals PLC |
JAZZ, |
78% | $121.25 | $190.38 | 57% | 6.1 |
| MP Materials Corp. Class A |
MP, |
92% | $20.09 | $30.00 | 49% | 34.5 |
| Iridium Communications Inc. |
IRDM, |
100% | $40.66 | $60.50 | 49% | 135.0 |
| Valaris Ltd. |
VAL, |
100% | $68.41 | $100.58 | 47% | 17.0 |
| Darling Ingredients Inc. |
DAR, |
81% | $49.51 | $71.00 | 43% | 11.3 |
| TKO Group Holdings Inc. Class A |
TKO, |
100% | $78.84 | $112.00 | 42% | 25.3 |
| Celsius Holdings Inc. |
CELH, |
81% | $50.04 | $70.85 | 42% | 52.9 |
| Perrigo Co. PLC |
PRGO, |
100% | $31.70 | $44.67 | 41% | 10.5 |
| Teradata Corp. |
TDC, |
75% | $44.10 | $62.09 | 41% | 18.5 |
| Frontier Communications Parent Inc. |
FYBR, |
82% | $24.34 | $34.00 | 40% | N/A |
| Civitas Resources Inc. |
CIVI, |
91% | $69.69 | $93.91 | 35% | 4.8 |
| HealthEquity Inc. |
HQY, |
100% | $65.81 | $88.33 | 34% | 23.9 |
| United Therapeutics Corp. |
UTHR, |
80% | $218.93 | $288.73 | 32% | 10.0 |
| Allegro MicroSystems Inc. |
ALGM, |
75% | $30.90 | $40.14 | 30% | 22.9 |
| Matador Resources Co. |
MTDR, |
88% | $57.61 | $74.60 | 29% | 6.9 |
| Essential Utilities Inc. |
WTRG, |
100% | $37.14 | $47.75 | 29% | 18.7 |
| Calix Inc. |
CALX, |
88% | $42.76 | $54.75 | 28% | 26.0 |
| Interactive Brokers Group Inc. Class A |
IBKR, |
80% | $82.11 | $104.44 | 27% | 13.2 |
| Source: FactSet | ||||||
Click on the tickers for more about each company.
Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.
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