It’s turning out to be a phenomenal earnings season.
Using the S&P 500 companies as a proxy, it’s abundantly clear that we are headed towards a very strong recovery. Of the 69% of index members that have reported results thus far, earnings have jumped 49.2% on 10.6% higher revenues. Moreover, 87.5% beat EPS estimates and 78.1% beat revenue estimates.
And it isn’t the large cap stocks alone that are taking part in the recovery. Small and mid-caps are doing equally as well. In fact, it has been seen that their smaller scale makes these companies more susceptible to recessions but their ability to act nimbly allows them to get out of the situation quicker.
Granted that the pandemic can’t be equated with a recession. But the health scare did lead to a recessionary condition, even if it was for just a quarter. And the impact continues to be felt in certain sections of the economy, even today.
Mid cap stocks often have higher growth rates than large cap stocks because they are younger. They’re also not as well-known since fewer analysts cover them. On the other hand, they usually carry lower risk than small caps because their business models, products and ideas have survived the initial years.
And yet, we don’t focus on mid-caps that much because it’s the large caps with their sprawling operations or the small caps with their unique products and ideas that capture headlines more often.
So as a diversification strategy, it might make sense to include some of these players in your portfolios.
Here are 5 stocks that you may want to choose from-
The Andersons (NASDAQ:ANDE), Inc. ANDE
The Andersons is a regional grain merchandiser with diversified businesses in agriculture, plant nutrient formulation and distribution, turf product production, railcar marketing and general merchandise retailing. The company maintains grain and production facilities throughout the Midwest and six retail locations in northern and central Ohio.
The company reported March quarter earnings that beat the Zacks Consensus Estimate by 866.7% on revenue that beat by 19.0%.
Current estimates represent EPS growth of 1,355.6% this year and 24.8% in the next.
The shares carry a Zacks Rank #1 (Strong Buy) and have a Value Score of A. They belong to the Agriculture – Products industry (top 7% of Zacks-classified industries).
ArcBest (NASDAQ:ARCB) Corp. ARCB
Headquartered in Fort Smith, Arkansas, ArcBest Corporation provides freight transportation of general commodities; motor carrier freight; business-to-business air transportation; ocean transport; global customizable supply chain solutions and integrated warehousing services. It also provides certain premium expedited freight transportation services to commercial and government customers as well as premium logistics services.
The company reported March quarter earnings that beat the Zacks Consensus Estimate by 71.2% on revenue that beat by 2.3%.
Current estimates call for EPS growth of 30.0% this year and 13.9% in the next.
The shares carry a Zacks Rank #2 (Buy) and have Value and Growth Scores of B. They belong to the Transportation – Truck industry (top 16% of Zacks-classified industries).
RentACenter, Inc. RCII
Headquartered in Plano, Texas, Rent-A-Center (NASDAQ:RCII) is the United States’ largest seller of rent-to-own durable goods such as consumer electronics, appliances, computers, furniture and accessories from recognized brands.
The company reported March quarter earnings that beat the Zacks Consensus Estimate by 18.9% on revenue that beat by 7.9%.
Current estimates represent EPS growth of 49.3% this year and 17.7% in the next. Both revenue and earnings estimates for 2021 were raised. The mid-point of the 2021 earnings guidance is now $5.58, much higher than the current estimate of $5.27. So significant estimate revisions are in the cards.
The shares carry a Zacks Rank #2 (Buy) and have a Value Score A. They belong to the Consumer Services – Miscellaneous industry (top 26% of Zacks-classified industries).
Medifast is a direct-selling company in the health and wellness industry. Through its well-known Optavia community, online channels and weight control centers, the company sells clinically-proven healthy living products and programs. The products part includes things like bars, bites, pretzels, puffs, cereal crunch, drinks, hearty choices, oatmeal, pancakes, pudding, soft serve, shakes, smoothies, soft bakes and soups. Programs are carried out by direct-selling agents called “coaches” that inculcate lifestyle changing habits in clients.
The company reported March quarter earnings that beat the Zacks Consensus Estimate by 27.2% on revenue that beat by 18.7%.
Current estimates represent EPS growth of 19.2% this year and 10.5% in the next. The mid-point of the 2021 earnings guidance is now $13.41, significantly higher than the current estimate of $10.89. So significant estimate revisions are in the cards.
The shares carry a Zacks Rank #2 (Buy) and have a Growth Score B. They belong to the Food – Miscellaneous industry (bottom 33% of Zacks-classified industries).
Gray Television (NYSE:GTN), Inc. GTN
Gray Television is a communications company headquartered in Atlanta, Georgia, and currently operates 15 CBS-affiliated television stations, seven NBC-affiliated television stations, seven ABC-affiliated television stations and four daily newspapers.
The company reported March quarter earnings that beat the Zacks Consensus Estimate by 80.0% on revenue that beat by 2.4%. The company expects strong growth in the current quarter.
Current estimates represent an EPS decline of 57.7% this year followed by an increase of 147.9% in the next. But they’re likely to be nudged higher given the strong outlook.
The shares carry a Zacks Rank #2 (Buy) and have a Value Score A. They belong to the Broadcast Radio and Television industry (bottom 28% of Zacks-classified industries).
One-Month Price Performance
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The Andersons, Inc. (ANDE): Free Stock Analysis Report
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MEDIFAST INC (MED): Free Stock Analysis Report
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