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Seeking Growth? Buy These 3 Top-Ranked Mid-Caps

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Mid-cap stocks can fly under the radar despite commonly offering a nice blend of growth potential and stability.

In addition, mid-caps are often seen as attractive acquisition targets for larger companies, potentially resulting in a buyout or merger that provides significant gains for shareholders.

Three mid-caps – Livent , Kinsale Capital Group (KNSL - Free Report) , and e.l.f. Beauty (ELF - Free Report) – have all seen their near-term earnings outlooks shift positively and carry solid growth profiles. For those seeking exposure, let’s take a closer look at each.

Kinsale Capital Group

Kinsale Capital offers various insurance and reinsurance products primarily through Commercial and Personal markets. Analysts have taken their earnings expectations notably higher across all timeframes, helping land it into a Zacks Rank #1 (Strong Buy).

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Image Source: Zacks Investment Research

The company sports an impressive growth profile, with earnings forecasted to climb 43% in its current year on 45% higher revenues. And in FY24, estimates allude to a further 22% bump in earnings paired with a 25% revenue jump.

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Image Source: Zacks Investment Research

In addition, Kinsale Capital boasts a shareholder-friendly nature, with its dividend yielding 0.2% annually. While the yield is on the lower end, the company’s 16.7% five-year annualized dividend growth rate helps pick up the slack.

e.l.f. Beauty

e.l.f. Beauty is a cosmetics company, with its products primarily consisting of face makeup, eye makeup, lip products, nail products, and cosmetic kits. The stock is a Zacks Rank #2 (Buy), with the revisions trend particularly notable for its current fiscal year.

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Image Source: Zacks Investment Research

Shares are undoubtedly expensive, with the current 54.2X forward earnings multiple residing on the higher end of the spectrum. Still, investors haven’t had any issue forking up the premium given the company’s projected growth, with earnings forecasted to soar 42% in its current fiscal year and 16% in FY25.

And to top it off, the company has delivered robust quarterly results as of late, exceeding both earnings and revenue expectations in ten consecutive quarters. Shares have regularly gotten a boost post-earnings, as we can see illustrated in the chart below.

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Image Source: Zacks Investment Research

Livent

Livent offers lithium chemicals for applications in batteries, aerospace alloys, pharmaceuticals, polymers, and various industrial applications. It’s hard to ignore the company’s growth profile, with earnings forecasted to climb 52% in its current year and a further 25% in FY24.

The stock sports a Zacks Rank #1 (Strong Buy), with expectations increasing across the board.

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Image Source: Zacks Investment Research

The company has consistently delivered positive bottom-line results, exceeding the Zacks Consensus EPS Estimate by an average of nearly 20% across its last four quarters. In its latest release, the company beat EPS expectations by 10% but fell short of revenue expectations, causing shares to face adverse price action post-earnings.

Bottom Line

Mid-cap stocks are sometimes overlooked, as many investors opt for the stability of large-caps or small-caps’ exciting natures.  

Still, mid-caps provide a solid blend of both growth potential and stability.

All three stocks above – Livent , Kinsale Capital Group (KNSL - Free Report) , and e.l.f. Beauty (ELF - Free Report)  – would be solid considerations for those with an appetite for mid-caps.

All three have witnessed favorable earnings estimate revisions in the near term, indicating optimism from analysts.


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