How should you be investing in 2022? It's a near certainty that the Fed will continue to pursue a more hawkish monetary policy for the rest of 2022. And right now the market is expecting interest rate increases to start in March 2022.
The thought that the Fed will take aggressive measures to combat inflation is still weighing on growth-minded investors? After all, stocks still look like the place to be.
If you're an investor looking to maximize your growth this year, you should first make sure you have a base of blue-chip stocks. These stocks can deliver solid returns no matter how the broader market goes. However, after that, you should still have your eyes on growth. And mid-cap stocks may be just the place to look.
Mid-cap stocks are defined by companies with a market capitalization between $2 billion and $10 billion. These companies are still in the growth phase so they're putting their profits to work in growing their business.
The recent market sell-off has put many of these stocks at attractive points. And while many of them still don't qualify as oversold by technical measures, they are offering significant upside at their current price points.
At some point the Fed is likely to get serious about whipping inflation. When it does, investors will become even more selective than they already are. By investing in these mid-cap stocks, you can stay one step ahead of whatever comes next.
Quick Links
- Darling Ingredients
- SoFi Technologies
- CRISPR Therapeutics
- Bally's
- Vimeo
- Victoria’s Secret
- Kinross Gold
#1 - Darling Ingredients (NYSE:DAR)
One of the most investable trends in 2021 was companies that engaged incredible environmental, social, and governance initiatives. You can say that ESG is in the DNA of Darling Ingredients (NYSE:DAR). The company is a “global leader in creating sustainable food, feed & fuel solutions from organic by-products.
This allows the company to compete in the biofuel sector. In fact, the company’s Diamond Green Diesel unit has a partnership with Valero Energy (NYSE:VLO) to create renewable diesel fuel from recycled animal fats. The company’s year-to-date revenue is up 35% from the prior year. And the earnings story is even better with EPS up 95% on a year-over-year basis.
Those results haven’t been enough to stem the drop in DAR stock which is down 8% since the beginning of the year and is trading near its 52-week low.
The stock chart for DAR stock is beginning to tip into the oversold category based on the relative strength indicator. And analysts have a price target of $94.75 which is a 56% upside from the stock’s closing price on January 27, 2022.
About Darling Ingredients
Darling Ingredients Inc develops, produces, and sells natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America, and internationally. The company operates through three segments: Feed Ingredients, Food Ingredients, and Fuel Ingredients. It offers ingredients and customized specialty solutions for customers in the pharmaceutical, food, pet food, feed, industrial, fuel, bioenergy, and fertilizer industries.
Read More - Current Price
- $33.13
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $53.44 (61.3% Upside)
#2 - SoFi Technologies (NASDAQ:SOFI)
Patient investors in SoFi Technologies (NASDAQ:SOFI) were rewarded in January when the fintech company received approval for its bank charter. This will set SoFi apart from other fintech companies like PayPal (NASDAQ:PYPL). Now the company is taking steps to acquire Golden Pacific Bancorp to complete the transition.
Unfortunately, the gains that SOFI stock received from the news were short-lived. The stock is now trending down as many bank stocks are as some of the big banks reported disappointing earnings.
This presents investors with the risk and reward of SoFi. The company is in the fintech sector, which is expected to continue to threaten the supremacy of traditional banking institutions. And SoFi has Galileo as part of its product offerings which is making it a sought-after partner for companies like Robinhood (NASDAQ:HOOD).
At the same time, SoFi now exists in two sectors, technology and financials. And SoFi is not yet a profitable company. Still, analysts give SOFI stock a $21.70 price target which is a 91% upside from the stock’s current level.
About SoFi Technologies
SoFi Technologies, Inc provides various financial services in the United States, Latin America, and Canada. It operates through three segments: Lending, Technology Platform, and Financial Services. The company offers lending and financial services and products that allows its members to borrow, save, spend, invest, and protect money.
Read More - Current Price
- $15.55
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 7 Hold Ratings, 3 Sell Ratings.
- Consensus Price Target
- $11.04 (29.0% Downside)
#3 - CRISPR Therapeutics (NASDAQ:CRSP)
The biotech sector is notoriously volatile. In the last 18 months when Covid-19 vaccines and therapeutics have boosted the valuations of many companies in the sector. However, that will turn investors' attention to the field of gene editing. And that’s why you should consider CRISPR Therapeutics (NASDAQ:CRSP).
The company has a partnership with Vertex Pharmaceuticals (NASDAQ:VRTX) to bring its lead gene therapy candidate out of clinical trials. CTX001 is a potentially curative gene therapy for both sickle cell disease and transfusion-dependent beta-thalassemia.
The words “revolutionary” and “game-changer” can be overused. Gene editing is an exciting field that is worthy of both of those terms. Nevertheless, there’s no assurance that the company will get one, or multiple, products through clinical trials. And in an environment where investors are fleeing from risk, CRSP stock can look risky.
But if you have a stomach for the speculation, analysts give the stock a $152.33 price target which is a 159% upside.
About CRISPR Therapeutics
CRISPR Therapeutics is a gene-editing company focused on developing transformative gene-based medicines for serious diseases using its proprietary CRISPR/Cas9 platform. CRISPR/Cas9 is a revolutionary gene-editing technology that allows for precise, directed changes to genomic DNA. CRISPR Therapeutics has established a portfolio of therapeutic programs across a broad range of disease areas including hemoglobinopathies, oncology, regenerative medicine and rare diseases.
Read More - Current Price
- $38.70
- Consensus Rating
- Hold
- Ratings Breakdown
- 9 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $77.93 (101.4% Upside)
#4 - Bally's (NYSE:BALY)
With a $1.8 billion market cap as of this writing, Bally’s (NYSE:BALY) is currently below the technical threshold for a mid-cap stock. However, it was solidly in the mid-cap sector for most of 2021. And with a little growth, it will fall in that category again.
The growth opportunity comes from its Bally Bet platform. This gives the company in the lucrative gaming/sports betting sector. That means it will be competing with heavy hitters (and established players) such as DraftKings (NASDAQ:DKNG). To help it compete, the company has partnerships in place with many regional sports networks through its partnership with Sinclair Broadcast Group (NASDAQ:SBGI).
Be advised that Bally’s has received a buyout offer from the hedge fund Standard General, its largest institutional investor. If the offer is accepted, Bally’s would go private. However, with the takeover offer being for $38 per share, price action could become volatile.
About Bally's
Bally's Corporation operates as a casino-entertainment company. It owns and manages casinos across 10 states, a golf course in New York, a horse racetrack in Colorado, and has access to OSB licenses in 18 states. It also owns Bally's Interactive International, an online gaming operator; Bally Bet, a sports betting platform; and Bally Casino, an iCasino platform.
Read More - Current Price
- $17.82
- Consensus Rating
- Hold
- Ratings Breakdown
- 1 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $17.14 (3.8% Downside)
#5 - Vimeo (NASDAQ:VMEO)
If you’re willing to take a walk on the speculative side of things, you may be interested in Vimeo (NASDAQ:VMEO). The stock has been under heavy selling pressure and is trading near 52-week lows. And as part of the technology sector, the losses have been accelerating since the beginning of 2022.
The company is “the world’s leading all-in-one video software solution.” Vimeo claims over 230 million users that range from start-up entrepreneurs to some of the world’s largest companies.
The company offers a video-as-a-service business model. In addition to a free basic package, consumers can join on several different tiers with fixed monthly costs. Vimeo is expanding its product offering with features like Video Library and Vimeo Events that include a do-it-yourself production studio.
This is a highly competitive sector. So you shouldn’t put capital at risk that you can’t afford to lose. However, the consensus 12-month price target of analysts tracked by MarketBeat is $36.57, a 186% upside from the VMEO stock price as of this writing.
About Vimeo
Vimeo, Inc, together with its subsidiaries, provides video software solutions worldwide. It provides the video tools through a software-as-a-service model, which enables its users to create, collaborate, and communicate with video on a single platform. The company also offers over-the-top OTT streaming and monetization services; AI-driven video creation and editing tools; and interactive and shoppable video tools.
Read More - Current Price
- $6.54
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 2 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $7.50 (14.7% Upside)
#6 - Victoria’s Secret (NYSE:VSCO)
Victoria’s Secret (NYSE:VSCO) began trading as a stand-alone public company after spinning off from Bath and Body Works (NYSE:BBWI) formerly L Brands in July. It’s been a wild ride, and right now, VSCO stock is down 25% from its 52-week high.
However, while most stocks have been pummeled in the recent market sell-off, Victoria’s Secret has done well. In fact, VSCO stock is up 15% in the 30 days ending January 27. And analysts give the stock an $81 price target which would be a 44% increase from its current price. Plus, institutional investors have been piling into the stock.
There are reasons to believe the company may be able to deliver. For starters, the company is reinventing itself as a more inclusive brand. This is paying off as millennials are embracing the brand. And on the company’s most recent earnings call in November, management reported sales margin and operating income growth despite the supply chain difficulties that are still weighing on revenue.
VSCO stock has a neutral technical outlook at this time, but shares are beginning to consolidate. And with the stock up 8% in the five trading days ending January 27, the stock looks to have momentum on its side.
About Victoria's Secret & Co.
Victoria's Secret & Co operates as a specialty retailer of women's intimate, and other apparel and beauty products worldwide. It offers bras, panties, lingerie, casual sleepwear, and athleisure and swim, as well as fragrances and body care; and loungewear, knit tops, activewear, and accessories and beauty under the Victoria's Secret, PINK, and Adore Me brands.
Read More - Current Price
- $41.75
- Consensus Rating
- Hold
- Ratings Breakdown
- 2 Buy Ratings, 7 Hold Ratings, 2 Sell Ratings.
- Consensus Price Target
- $36.73 (12.0% Downside)
#7 - Kinross Gold (NYSE:KGC)
In times of market volatility, precious metals are usually considered to be a safe haven asset and a hedge against inflation. But that hasn’t been the case so far in 2022. However, true believers in the value and importance of having precious metals in your portfolio may find Kinross Gold (NYSE:KGC) attractive.
The Canadian-based company is involved in the acquisition and development of gold properties primarily in eight countries. The company is also involved in the extraction and processing of gold-containing ores, reclamation of gold-mining properties as well as the production and sale of silver.
The headwind for the company at the moment is that it’s seeing falling year-over-year earnings. And KGC stock is down 21% in the last 12 months and 8% in 2022 alone. For most of 2021, that was understandable as investors flooded to cryptocurrency. However, with crypto assets being whipsawed by the current market sell-off, gold is likely to start looking more attractive which is a bullish argument for Kinross Gold.
About Kinross Gold
Kinross Gold Corporation, together with its subsidiaries, engages in the acquisition, exploration, and development of gold properties principally in the United States, Brazil, Chile, Canada, and Mauritania. The company operates the Fort Knox mine and the Manh Choh project in Alaska, as well as the Round Mountain and the Bald Mountain mines in Nevada, the United States; the Paracatu mine in Brazil; the La Coipa and the Lobo-Marte project in Chile; the Tasiast mine in Mauritania; and the Great Bear project in Canada.
Read More - Current Price
- $9.10
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 2 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $11.13 (22.3% Upside)
If you're still not sure that mid-cap stocks are right for you, a good way to gain exposure to mid-cap stocks is through mutual funds and exchange-traded funds (ETFs) that focus on mid-cap stocks. Last year, mid-cap stocks outperformed the broader market. And investing in a fund that focuses on mid-cap companies is a way to get diversification with companies that are still growing.
Today, there are mutual funds for just about every investment objective and risk tolerance. For example, the Fidelity Index Mid Cap Fund (NYSEARCA:FSMD) closely tracks the Russell Midcap index and is heavily weighted to the technology, industrials, consumer cyclical and financial services sectors.
And we all know that homebuilder stocks have done well. So it should be no surprise that one of the best-performing mid-cap ETFs is the SPDR S&P Homebuilders ETF (NYSEARCA:XHB).
More Investing Slideshows:
