In this article, we’ll look at the 10 Best Debt-Free Mid-Cap Stocks to Buy According to Hedge Funds.
Mid-cap stocks are poised for an impressive run heading into the US midterm election. According to Bank of America strategists led by Michael Hartnett, aggressive intervention by the US President Donald Trump’s administration to reduce the prices of energy, healthcare, credit, housing, and electricity is poised to be the catalyst that pushes mid-cap stocks higher.
“We are long Main Street, short Wall Street until Trump approval rating up on policy pivot to address affordability,”Bank of America Strategists wrote in a note.
In addition, the strategists expect mid-cap stocks to rally amid the ongoing rotation out of tech amid concerns about disruption from artificial intelligence.
According to TCW Group global head of distribution Jennifer Grancio, opportunities are increasingly emerging around small and mid-cap companies that sat outside the market’s focus in the past few years. The sentiment comes on the Nasdaq 100 dropping 4.6% and posting its biggest three-day drop since April 2024. The drop underlined investors’ concerns about premium valuations around large caps.
On the other hand, hopes of stronger US economic data and a more dovish US Federal Reserve continue to improve sentiments around mid-cap companies. In addition, mid-cap companies continue to attract interest as they possess established business models and expansive market opportunities to capitalize on the rotation from large-cap companies. Positive earnings revisions and strong liquidity will also continue to boost demand for equities beyond large-cap blue-chip names.
Our Methodology
To identify the best debt-free Mid Cap stocks, we first compiled a list of U.S. stocks with a market capitalization of at least $2 billion. For the resulting list of stocks, we compared their enterprise value (EV) to their market capitalization (EV-to-market cap ratio) and shortlisted those with a ratio below 1.0. A ratio of 1.0 or below indicates that the company has no debt or minimal debt. From this refined list, we identified the top 12 stocks with a potential upside of at least 15% as of February 16, and the highest hedge fund ownership by leveraging data from Insider Monkey’s Q3 2025 hedge fund database. Finally, we ranked these stocks in ascending order by the number of hedge funds holding positions.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research shows we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
Best Debt-Free Mid-Cap Stocks to Buy According to Hedge Funds
10. Bitmine Immersion Technologies, Inc. (NYSE:BMNR)
Stock Upside Potential: 105.15%
Number of Hedge Fund Holders: 20
Bitmine Immersion Technologies, Inc. (NYSE:BMNR) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 9, Bitmine Immersion Technologies, Inc. (NYSE:BMNR) confirmed that it has accumulated $10 billion in combined cryptocurrency, cash, and investment holdings.
The company’s portfolio included 4,325,738 Ethereum tokens valued at about $9.2 billion. It also maintains 193 Bitcoin and a $200 million investment in Beast Industries, $595 million in cash, and a $19 million stake in Eightco Holdings. Bitmine Immersion is increasingly taking advantage of a slump in the ETH network, citing strong on-chain activity and record-high daily transactions of 2.5 million.
The company is also in the process of launching the Made in America Validator Network, which could take its ETH staking rewards to $374 million.
“Bitmine has staked more ETH than other entities in the world,” said Thomas Lee, Executive Chairman of Bitmine, in the press release.
Meanwhile, BlackRock has increased its stake in Bitmine Immersion Technologies to 9.05 million shares, valued at $246 million. The investment follows ARK Invest, also boosting its stake, affirming growing interest from institutional investors.
On January 16, B.Riley kept its Buy rating on Bitmine Immersion Technologies and repeated its $47 price target after the company invested $200 million in Beast Industries, linked to content creator MrBeast. The move expands BMNR beyond its Ethereum strategy and could give it access to MrBeast’s huge audience of 450 million followers, while opening new opportunities in DeFi services. B.Riley said the deal boosts BMNR’s credibility as a smart capital allocator, though it also noted risks around regulation and distribution of MrBeast’s planned financial platform.
Bitmine Immersion Technologies, Inc. (NYSE:BMNR) is a blockchain technology company that has transformed into a leading Ethereum (ETH) treasury company and provider of immersion-cooled digital asset infrastructure.
9. SailPoint, Inc. (NASDAQ:SAIL)
Stock Upside Potential: 67.01%
Number of Hedge Fund Holders: 25
Sailpoint Inc. (NASDAQ:SAIL) is one of the best debt-free mid-cap stocks to buy according to hedge funds. On February 17, Mizuho analyst Gregg Moskowitz cut the price target on Sailpoint Inc. (NASDAQ:SAIL) from $23 to $20 but kept a Neutral rating. The firm lowered targets across software stocks because of recent sector weakness, though it still sees some good long-term opportunities. Mizuho noted that fears about AI disruption have hurt sentiment badly, but its latest checks showed software demand holding up well overall.
On February 4, Sailpoint Inc. underlined it is focused on capitalizing on increased customer demand for modern adaptive identity security solutions. The company is increasingly delivering the next generation of identity and security solutions built to adapt and scale modern enterprise. The push is part of an effort to capitalize on the rapid integration of AI and automated agents into the enterprise, which has created new security challenges. The company has already unveiled SailPoint Agent Identity Security, which allows organizations to discover, classify, govern, and secure every agent.
Accenture Chief Information Officer Tony Leraris has already confirmed plans to evaluate SailPoint’s Agent Identity Security and determine how it can complement its existing controls and support enterprise-wide AI adoption.
“We saw an opportunity to help organizations navigate this new phase of identity security with innovations that can adapt to modern automated, complex identity environments,” said Chandra Gnanasambandam, CTO and EVP Product, SailPoint. “The strong response we’ve seen from our customers signals that they have been waiting for a vision like this and are now moving to adopt it quickly and with conviction.”
SailPoint, Inc. (NASDAQ:SAIL) is a leading cybersecurity company specializing in identity security and governance. The company provides AI-driven software solutions designed to manage, secure, and govern access to applications and data for enterprises, ensuring that the right users have the right access to the right resources at the right time.
