With the U.S. economy reopening and seeking to regain its pre-pandemic levels, small- and mid-cap stocks are expected to grow exponentially. However, considering the increasing market volatility, it could be wise to invest in fundamentally sound mid-cap stocks AutoNation (NYSE:AN), OneMain (OMF), Penske Automotive (PAG), and Piper Sandler (PIPR). They each have an A (Strong Buy) rating in our POWR Ratings system. Read on.The U.S. returned to its pre-pandemic economic level in the second quarter, as GDP increased by 6.5%. In fact, with a strong vaccination drive, favorable government policies, and strong corporate earnings, the U.S. economy is now bigger than its pre-pandemic level.
Given this backdrop and a low-interest-rate environment, we think it could be wise to bet on mid-cap stocks. That’s because mid-cap companies tend to outperform the broader markets and industry giants during periods of economic boom, owing to higher consumer spending and bullish market sentiment. A low-interest-rate environment also increases these companies’ access to capital.
However, with surging market volatility, rising COVID-19 cases and geopolitical tensions, analysts predict big price swings in the coming period. Thus, we think relatively stable mid-cap stocks AutoNation, Inc. (AN), OneMain Holdings, Inc. (NYSE:OMF), Penske Automotive Group, Inc. (NYSE:PAG), and Piper Sandler Companies (PIPR), which each has an A (Strong Buy) rating in our proprietary POWR Ratings system, could be ideal bets now.