16 Best Mid-Cap Growth Stocks To Buy Now

Published on January 12, 2024 at 9:23 am by Fahad Saleem in Hedge Funds, News

In this article, we will take a detailed look at the 16 Best Mid-Cap Growth Stocks To Buy Now. For a quick overview of such stocks, read our article 5 Best Mid-Cap Growth Stocks To Buy Now.

Investors are hopeful that small- and mid-cap stocks will experience a broader rally this year after getting hammered for most part of the previous year as all eyes remain focused on the Magnificent Seven group of stocks amid the AI boom. Noah Blackstein, senior portfolio manager at Dynamic Fund, said in a program on CNBC that market returns were “broadening out” to small- and mid-cap stocks and these stocks are expected to catch up in 2024.

Despite their lackluster performance in 2023, mid-cap stocks managed to end the year at a positive note when compared to large- and small-cap stocks. The S&P MidCap 400 was up 14.5% to 2781.54 in 2023. This was just 5% below the index’s record high level. Compared to mid-cap stocks, the S&P 500 large-cap index was up 24.2% while the Russell 2000 small-cap index was up 15.1% in the period.

According to a latest Wall Street Journal report, Karim Ahamed, an investment adviser for Cerity Partners in Chicago, said that mid-cap stocks provide a decent blend of growth potential (of small-cap stocks) and financial stability (of large-cap stocks).

As investors prepare to look beyond mega-cap tech stocks like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA) in 2024 and invest in other, relatively unknown companies with growth potential, we decided to see which mid-cap stocks with high revenue growth are popular among smart money investors.

Photo by Kaleidico on Unsplash

Methodology

For this article we first used a stock screener to identify mid-cap stocks with revenue growth rates of over 30% over the past five years as well as in the most recent quarters. From these stocks we chose 16 stocks with the highest number of hedge fund investors. Why hedge funds? Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

16. Progyny Inc (NASDAQ:PGNY)

Number of Hedge Fund Investors: 32

Benefits management company Progyny Inc (NASDAQ:PGNY) is one of the best mid-cap growth stocks to buy according to hedge funds. In November, Progyny Inc (NASDAQ:PGNY) posted third quarter results. GAAP EPS in the period came in at $0.16, beating estimates by $0.05. Revenue jumped about 36.8% year over year to $280.9 million, beating estimates by $9.55 million.

Polen Global SMID Company Growth Strategy made the following comment about Progyny, Inc. (NASDAQ:PGNY) in its Q3 2023 investor letter:

“We bought a new position in Progyny, Inc. (NASDAQ:PGNY), a company owned in our U.S. strategies for some time. They are a leading provider of fertility benefit solutions, and through their differentiated approach, their clients can pursue the most effective treatment and achieve optimal outcomes. We believe the company has only a mid-single digit share of its potential total addressable market and is the most dominant player within the fast-growing managed care category. They are already profitable, earn high returns on incremental capital, and have plenty of runway to grow top-line growth as they continue to win new clients and add new services.”

15. Shoals Technologies Group Inc (NASDAQ:SHLS)

Number of Hedge Fund Investors: 33

Goldman Sachs recently released a list of 2023 laggards it believes could gain in 2024. Shoals Technologies Group Inc (NASDAQ:SHLS) made it to the list.

A total of 33 hedge funds tracked by Insider Monkey had stakes in Shoals Technologies Group Inc (NASDAQ:SHLS) that provides electrical balance of system (EBOS) solutions for solar and electric vehicle charging applications in the United States.

ClearBridge Select Strategy made the following comment about Shoals Technologies Group, Inc. (NASDAQ:SHLS) in its Q3 2023 investor letter:

“Solar energy technology companies SolarEdge and Shoals Technologies Group, Inc. (NASDAQ:SHLS), meanwhile, saw headwinds from destocking in the U.S. and Europe. U.S. demand could slow further due to new net metering rules that reduce the value to consumers from sending excess residential solar energy back to the grid. SolarEdge, which makes inverters for solar systems as well as residential and commercial battery systems, is also facing rising battery competition in the U.S. from Tesla.”

14. Confluent Inc (NASDAQ:CFLT)

Number of Hedge Fund Investors: 34

Data streaming platform company Confluent Inc (NASDAQ:CFLT) is one of the best mid-cap growth stocks to buy according to hedge funds. In November, Bernstein started covering the stock with an Outperform rating and a $34 price target.

As of the end of the third quarter, 34 hedge funds tracked by Insider Monkey had stakes in Confluent Inc (NASDAQ:CFLT).

13. Shockwave Medical Inc (NASDAQ:SWAV)

Number of Hedge Fund Investors: 34

Medical device company Shockwave Medical Inc (NASDAQ:SWAV) ranks 13th in our list of the best mid-cap growth stocks to buy according to hedge funds. The stock has gained about 11% over the past one month through January 5. In November Shockwave Medical Inc (NASDAQ:SWAV) posted strong Q3 results. GAAP EPS in the quarter came in at $0.92, beating estimates by $0.12. Revenue in the quarter jumped 41.6% year over year to $186.02 million, surpassing estimates by $1.3 million.

A total of 34 hedge funds in Insider Monkey’s database of 910 hedge funds had stakes in Shockwave Medical Inc (NASDAQ:SWAV). The biggest hedge fund stakeholder of Shockwave Medical Inc (NASDAQ:SWAV) was Paul Marshall and Ian Wace’s Marshall Wace LLP which owns an $112 million stake in Shockwave Medical Inc (NASDAQ:SWAV).

ClearBridge Mid Cap Growth Strategy made the following comment about Shockwave Medical, Inc. (NASDAQ:SWAV) in its Q3 2023 investor letter:

“We also added a new position in Shockwave Medical, Inc. (NASDAQ:SWAV), in the health care sector. The company’s innovative products help clear blockages inside arteries at a lower risk and higher efficiency than other, traditional solutions leading to more optimal outcomes for patients with coronary, vascular and heart valve diseases. We believe these innovations leave Shockwave poised for higher growth, improved margins and attractive free cash flow in a large, total addressable market.”

12. Monday.Com Ltd (NASDAQ:MNDY)

Number of Hedge Fund Investors: 37

Project management software company Monday.Com Ltd (NASDAQ:MNDY) shares rose in November after strong Q3 results and a bullish Q4 outlook. Monday.Com Ltd (NASDAQ:MNDY) expects revenue of $196 million to $198 million in the fourth quarter of 2023, while the consensus estimate for the figure is $.194.96 million.

Out of the 910 hedge funds tracked by Insider Monkey, 37 hedge funds reported owning stakes in Monday.Com Ltd (NASDAQ:MNDY). The most significant stake in Monday.Com Ltd (NASDAQ:MNDY) is owned by Brandon Haley’s Holocene Advisors which owns a $114 million stake in Monday.Com Ltd (NASDAQ:MNDY). In addition to Monday.com, hedge funds are also piling into mega-cap stocks like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA).

11. Intra-Cellular Therapies Inc (NASDAQ:ITCI)

Number of Hedge Fund Investors: 37

Bank of America recently released a list of its favorite SMID-cap biotech stocks for 2024. Intra-Cellular Therapies Inc (NASDAQ:ITCI) made it to the list. In December, the stock came in the spotlight amid takeover speculation following rumors that JPMorgan and Centerview may be involved with advising on a deal, according to Betaville.

Insider Monkey’s database of 910 hedge funds shows that 37 hedge funds had stakes in Intra-Cellular Therapies Inc (NASDAQ:ITCI).

TimesSquare Capital made the following comment about Intra-Cellular Therapies, Inc. (NASDAQ:ITCI) in its Q3 2022 investor letter:

“Slipping by -18% was Intra-Cellular Therapies, Inc. (NASDAQ:ITCI), which develops small molecule treatments for neurological disorders. The company reported revenues that were better than expected, though earnings were lower. There was an acceleration of sales for Caplyta, a treatment for schizophrenia and bipolar depression. However, some investors appeared concerned that as Caplyta volumes increased to a higher level that the rate of growth will slow. We view the projected growth trajectory positively, as well as Caplyta’s potential for use in other indications, so we added to our position.”

10. BridgeBio Pharma Inc (NASDAQ:BBIO)

Number of Hedge Fund Investors: 41

California-based BridgeBio Pharma Inc (NASDAQ:BBIO) ranks 10th in our list of the best mid-cap growth stocks to buy now according to smart money investors.

As of the end of the third quarter of 2023, 41 hedge funds tracked by Insider Monkey had stakes in BridgeBio Pharma Inc (NASDAQ:BBIO).

In December, BridgeBio Pharma Inc (NASDAQ:BBIO) said it submitted a New Drug Application to the FDA for approval of its drug acoramidis for the treatment of ATTR-CM, a potentially fatal disease of the heart muscle.

9. Gitlab Inc (NASDAQ:GTLB)

Number of Hedge Fund Investors: 42

Gitlab Inc (NASDAQ:GTLB) shares recently jumped after the company posted strong third quarter results. Gitlab Inc (NASDAQ:GTLB) said it earned $0.09 per share on an adjusted basis in the period, beating estimates by $0.10.

Revenue in the period jumped 32.5% year over year to $149.67 million, surpassing estimates by $8.66 million.

A total of 42 hedge funds tracked by Insider Monkey had stakes in Gitlab Inc (NASDAQ:GTLB) as of the end of the September quarter. The biggest stake in Gitlab Inc (NASDAQ:GTLB) is owned by Mick Hellman’s HMI Capital which had a $328 million stake in Gitlab Inc (NASDAQ:GTLB).

8. Roivant Sciences Ltd (NASDAQ:ROIV)

Number of Hedge Fund Investors: 44

Led by American businessman and presidential candidate Vivek Ramaswamy, Roivant Sciences Ltd (NASDAQ:ROIV) is a biotech company headquartered in the UK. Ramaswamy recently sold over $33 million worth of shares of Roivant Sciences Ltd (NASDAQ:ROIV).

As of the end of the third quarter of 2023, 44 hedge funds tracked by Insider Monkey had stakes in Roivant Sciences Ltd (NASDAQ:ROIV). The most significant stake in Roivant Sciences Ltd (NASDAQ:ROIV) is owned by Daniel Gold’s QVT Financial which owns a $1.3 billion stake in Roivant Sciences Ltd (NASDAQ:ROIV).

As the market begins to look beyond just a handful of names like Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN) and NVIDIA Corp (NASDAQ:NVDA), mid-cap stocks like ROIV are poised to remain in the spotlight this year.

7. Lantheus Holdings Inc (NASDAQ:LNTH)

Number of Hedge Fund Investors: 44

Diagnostic and therapeutic products company Lantheus Holdings Inc (NASDAQ:LNTH) ranks 7th in our list of the best mid-cap growth stocks to invest in according to hedge funds.

A total of 44 hedge funds out of the 910 funds tracked by Insider Monkey were long Lantheus Holdings Inc (NASDAQ:LNTH) as of the end of the September quarter.

Earlier this month, Lantheus Holdings Inc (NASDAQ:LNTH) stock was downgraded by William Blair to market perform. The investment firm cited disappointing data for Lantheus Holdings Inc’s (NASDAQ:LNTH) prostate cancer drug candidate PNT2002.

ClearBridge Small Cap Growth Strategy made the following comment about Lantheus Holdings, Inc. (NASDAQ:LNTH) in its Q3 2023 investor letter:

“We also made an investment in Lantheus Holdings, Inc. (NASDAQ:LNTH), which offers a portfolio of diagnostic health care products, primarily serving the complex nuclear imaging market. The company also has a pipeline of disruptive nuclear therapeutics (radiopharmaceuticals), creating a unique combination of strong profitability and cash flow generation with attractive growth opportunities in pipeline and existing products. The operational and logistical challenges of operating in nuclear medicine provide Lantheus a durable moat in this emerging therapeutic market.”

6. Procore Technologies Inc (NYSE:PCOR)

Number of Hedge Fund Investors: 43

Cloud-based construction management platform company Procore Technologies Inc (NYSE:PCOR) ranks 6th in our list of the best mid-cap growth stocks to buy according to hedge funds. As of the end of the September quarter, 43 hedge funds tracked by Insider Monkey had stakes in Procore Technologies Inc (NYSE:PCOR). The biggest hedge fund stakeholder of Procore Technologies Inc (NYSE:PCOR) was Eric Bannasch’s Cadian Capital which owns a $198 million stake in Procore Technologies Inc (NYSE:PCOR).

Artisan Small Cap Fund made the following comment about Procore Technologies, Inc. (NYSE:PCOR) in its Q3 2023 investor letter:

“Procore Technologies, Inc. (NYSE:PCOR) is a construction management software company with several products used for project management, quality and safety, and project financials. Its customers include building owners, general contractors and sub-contractors. Our conviction was increased after attending an analyst day in the quarter. Not only were we able to speak to customers at the event, but we got to test drive more of its software applications, including payments and invoicing. Construction is a cyclical industry. However, over time we believe the company’s profit cycle will become more stable than its end market given an ongoing digitalization trend within the construction industry, a diverse client base, large backlogs, high customer retention and the ability to cross-sell products that improve efficiency and margins. Furthermore, the company has access to a lot of data and is exploring AI as a way to help customers become more efficient, potentially enhancing its value proposition and pricing power.”

Click to continue reading and see the 5 Best Mid-Cap Growth Stocks To Buy Now.

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Disclosure. None. 16 Best Mid-Cap Growth Stocks To Buy Now was initially published on Insider Monkey.

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Published on May 1, 2024 at by Inan Dogan, PhD

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