We recently published a list of 10 Best Performing Mid Cap Stocks to Buy According to Analysts. In this article, we are going to take a look at where AST SpaceMobile, Inc. (NASDAQ:ASTS) stands against other best performing mid cap stocks to buy according to analysts.
On February 7, Simeon Hyman, Global Investment Strategist at ProShares Advisors, appeared on CNBC to discuss the upcoming jobs report and its expected impact on the market. He believes that the market will hold up, and particularly cites mid-cap stocks as an optimal balance for risk and return. He noted that the economy has shown strength in various sectors, such as the ISM manufacturing index, which recently beat expectations. This broadening of economic growth suggests that the jobs numbers might be decent. Hyman also highlighted the positive earnings growth in the S&P 500, with about three-quarters of companies reporting a 12% year-over-year increase, which is encouraging news.
Recently, the mega-cap tech stocks have shown some weakness despite the overall market being on pace for a winning week. Hyman observed that while this broadening of market performance is positive, it also indicates risk, given that the tech sector still accounts for over 30% of the S&P 500 and remains in the red for the year. His word of the day was mid-caps, which he believes are historically the sweet spot in the market. Mid-caps have outperformed both large and small-cap stocks over the decades. Currently, mid-caps are undervalued, offering investors about $0.50 on the dollar, a situation that hasn’t occurred with small caps despite their underperformance. The key advantage of mid-caps is their earnings growth, which sets them apart from small-caps. When discussing mid-caps versus small caps, Hyman highlighted that mid-caps also have a strong domestic focus, with about 75% of their revenues coming from domestic sources. This is similar to small caps but with a crucial difference: mid-caps generally offer higher quality than small caps, lacking the losses and negative earnings often seen in small-cap companies. This makes mid-caps an attractive option for investors looking for stable growth.
Methodology
We used the Finviz stock screener to compile a list of the best-performing mid-cap stocks that were trading between $2 billion and $10 billion. We then picked the top 10 stocks with year-to-date gains higher than 20% and an average upside potential of over 25%. The stocks are ranked in ascending order of their upside potential. We have also added the hedge fund sentiment for each stock, as of Q4 2024, which was sourced from Insider Monkey’s database.
Note: All data is as of February 24.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An aerial view of a communications satellite in orbit, beaming its signal down to Earth.
AST SpaceMobile, Inc. (NASDAQ:ASTS)
Year-to-Date Performance as of February 24: 29.27%
Upside Potential as of February 24: 31.77%
Number of Hedge Fund Holders: 22
AST SpaceMobile, Inc. (NASDAQ:ASTS) is developing a satellite network that will enable standard smartphones to connect directly to space-based broadband. It aims to eliminate cellular coverage gaps, extend connectivity to underserved regions, and provide communication beyond the reach of traditional land-based networks.
Cantor Fitzgerald began covering the company on February 6, with an Overweight rating and a $30 price target. This sentiment came due to its strong telecom and tech partnerships, defense potential, and supply chain advantages. They highlighted the company’s long-term opportunities in AI integration and government contracts, particularly with the Space Development Agency.
The company’s primary focus is building its satellite-based cellular broadband network, centered on its BlueBird satellites. It successfully launched five Block 1 satellites, aiming for near 100% US coverage using low-band spectrum. These satellites will integrate with partners like AT&T and Verizon for beta services. The company is developing Block 2 satellites, powered by its AST5000 ASIC chip, which will increase processing bandwidth tenfold. It secured launch agreements with Blue Origin and SpaceX for up to 60 satellites in 2025-2026.
This transition from R&D to commercial operations involves scaling manufacturing and launch efforts. AST SpaceMobile, Inc. (NASDAQ:ASTS) ended Q3 2024 with $518.9 million in cash, which includes proceeds from warrant exercises and ATM facilities. The goal is to provide cellular broadband to mobile network operators globally, reaching 2.8 billion subscribers.
Overall, ASTS ranks 6th on our list of best performing mid cap stocks to buy according to analysts. While we acknowledge the growth potential of ASTS as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ASTS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
