Mid-cap stocks don’t receive much attention at times, as many are fixated on small-caps’ explosive growth characteristics and large-caps’ stable natures.
However, since they’re often less followed by analysts, it allows investors a window to get in ‘early’ before the crowd catches on.
In addition, mid-cap stocks are often seen as attractive acquisition targets for larger companies, potentially resulting in a buyout or merger that provides significant gains.
Three mid-cap stocks that investors should keep a close eye on – Graphic Packaging Holding Company GPK, Wingstop WING, and Jinko Solar JKS – have all seen their near-term earnings outlook improve as of late.
Let’s take a closer look at each company.
Wingstop
Wingstop offers cooked-to-order, hand-sauced, and tossed chicken wings. Currently, the stock carries a favorable Zacks Rank #1 (Strong Buy).
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The company has posted notably strong quarterly results as of late, exceeding the Zacks Consensus EPS Estimate by an average of 31% over its last four quarters. Just in its latest release, the wing titan penciled in a 28% EPS beat and reported revenue nearly 8% ahead of expectations.
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Shares are undoubtedly expensive, with the current 14.7X forward price-to-sales ratio sitting on the high end of the spectrum and well above the Zacks Retail and Wholesale sector average.
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Graphic Packaging Holding Company
Graphic Packaging Holding is a leading provider of paperboard packaging solutions for various products. Analysts have raised their earnings estimates across the board, helping land the stock into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
In addition, GPK shares aren’t stretched in terms of valuation, with the current 8.5X forward earnings multiple sitting nowhere near the 14.3X five-year median and the Zacks Industrial Products sector average.
Image Source: Zacks Investment Research
Jinko Solar
Jinko Solar is a widely famous solar technology company with its business covering the core links of the photovoltaic industry chain. The stock is currently a Zacks Rank #1 (Strong Buy).
The company posted better-than-expected results in its latest release, exceeding the Zacks Consensus EPS Estimate by more than 300%. Quarterly revenue totaled $3.4 billion, 3% ahead of expectations and improving by a rock-solid 45% year-over-year.
Image Source: Zacks Investment Research
It’s hard to ignore the company’s growth trajectory, with earnings forecasted to climb 60% on 32% higher revenues in its current fiscal year (FY23). And in FY24, earnings and revenue are forecasted to grow 15% and 9%, respectively.
Bottom Line
Mid-cap stocks are sometimes forgotten about, as many investors opt for large-caps or the ‘more exciting’ small-caps.
However, mid-caps provide great opportunities for investors to get in early before others catch on. In addition, they can provide solid diversification to a portfolio.
All three mid-caps above – Graphic Packaging Holding Company GPK, Wingstop WING, and Jinko Solar JKS – would be solid considerations for those with an appetite for mid-caps.
All three have witnessed favorable earnings estimate revisions recently, indicating that analysts have become optimistic regarding their near-term prospects.
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