Cream of the Crop: 5 Mid-Cap Tech Stocks Promise Big Returns

For Immediate Release

Chicago, IL –September 6, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Perficient PRFT, Chegg CHGG, CyberArk Software CYBR, OSI Systems OSIS and Itron ITRI.

Here are highlights from Thursday’s Analyst Blog:

Placing bets on mid-cap stocks is often considered a discreet portfolio diversification strategy. These stocks with a market capitalization of $1-$5 billion integrate lucrative prospects of both small and large-cap stocks.

The mid-cap stocks, although less stable than the large-cap ones, offer higher returns. Moreover, these are more mature businesses and are less risk-prone or volatile than the small-cap ones.

Given the uncertainty in the market due to the US-China trade tension, decelerating global economy and geopolitical turbulences, investment in mid-cap stocks should be wisely executed in our opinion.  These stocks are less vulnerable to losses in case the trade deal falls flat as the penetration level is slim in the global markets.

Notably, mid-cap stocks have surged so far this year. While the S&P 400 Mid-cap Index (SP400) has returned 9.4% year to date.

Technology’s Impact Inimitable

Technology has been one of the most bankable sectors for investors despite the current macroeconomic challenges it is subjected to.

Notably, the Technology Select Sector SPDR ETF has gained 28.9% on a year-to-date basis compared with the S&P 500’s rally of roughly 14.5%.

Rapid adoption of AI, cloud computing, IoT, autonomous vehicles and wearables has been fueling growth for the sector. Moreover, increasing video streaming, growing demand for smart speakers and connected devices powered by AI, machine learning and deep learning, are key catalysts.

Additionally, the accelerated deployment of 5G technology and faster-than-expected growth in robotics set the stage for more development.

Although the aforementioned factors look promising for the sector, the unstable macroeconomic scenario is quite an eyesore. Notably, the semiconductor industry, which forms the fulcrum of the tech sector, is caught in a volatile geopolitical situation stemming from the trade and tariff dispute as well as economic weakness in China.

Nonetheless, the much-anticipated growth revival in the second half of the current year is raising investor’s optimism.

Key Picks

The attractive growth opportunities that the technology sector presents make it a favorite among investors. As the mid-cap tech stocks have greater potential to offer better returns, with the help of the Zacks Stock Screener, we made our selection foolproof.

To shortlist the mid-cap stocks from the vast universe of tech companies, we picked those that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

To further narrow the list down, we chose stocks with an impressive Zacks Growth Score of A or B. Our research shows that stocks with a Growth Score of A or B when combined with a Zacks Rank of 1 or 2 offer the best upside potential.

Perficient has a Zacks Rank #1 and a Growth Score of A. The company has a market cap of $1.22 billion.

The company delivered average four-quarter positive surprise of 9.62% and has a long-term earnings growth rate of 10.8%. The Zacks Consensus Estimate of $2.01 for 2019 earnings has been maintained in the past 30 days. The stock has surged 67.8% year to date.

Chegg is a Zacks #1 Ranked player and has a Growth Score of B. The company has a market cap of $4.5 billion.

The company pulled off average four-quarter earnings surprise of 57.7% and has a long-term earnings growth rate of 30%. The Zacks Consensus Estimate for 2019 earnings of 78 cents has been stable in the past 30 days. The stock has soared 32.3% year to date.

CyberArk Software has a Zacks Rank of 2 and a Growth Score of B. The company has a market cap of $4.31 billion.

The company came up with average four-quarter positive surprise of 47.69% and has a long-term earnings growth rate of 15.8%. The Zacks Consensus Estimate of $2.28 for 2019 earnings has been revised 6.5% upward in the past 30 days. The stock has jumped 54.1% year to date.

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