In this piece, we will take a look at the 11 oversold midcap stocks to buy now. If you want to skip our coverage of overbought, oversold, small cap, and mid cap stocks along with the latest stock market news, then you can skip ahead to the 5 Oversold MidCap Stocks To Buy Now.
Since stocks are publicly traded, their prices fluctuate in response to economic and political news. The news can either cover specific firms or the broader economy, with this principle also determining the equities whose prices fluctuate in response to daily events. These fluctuations can be measured through indicators that can quantify whether a stock is oversold or overbought. These two descriptors of stock performance stem from the fact that human decisions, particularly those surrounding assets, are influenced by the market itself. As a result, collectively buying or selling stocks can make them oversold or overbought, and provide some opportunity to make a profit from stability that follows.
Stocks are determined to be overbought or oversold through an indicator called the relative strength index. This indicator measures share price performance and is often read along with current share prices to help make a trading decision. So, for instance, if a stock is thought to be oversold, and its price is rising, then some traders could be comfortable buying it. For more details on what RSI readings determine whether a stock is overbought or oversold, you can take a look at 11 Oversold Value Stocks To Buy Now.
Most news and media attention is focused on a collective of elite stocks called mega caps. These are among the largest companies in the world and are worth trillions of dollars. However, as a large portion of their share price growth has already occurred, and they control major sections of their markets, in terms of growth, mega cap stocks often lose out when compared to other stocks. These 'other' stocks can include small cap and mid cap stocks, and for the former, you can take a look at 15 Small-Cap Stocks with High Potential.
MidCap stocks are those stocks that have a market value ranging between $2 billion and $10 billion. They offer investors more stability than small cap stocks due to their stable business models and market share. Additionally, mid cap stocks also carry the potential to grow big in case of growth companies, and stability if the shares belong to stocks in the consumer staples sector.
Looking at some recent top performing mid cap stocks, Viking Therapeutics, Inc. (NASDAQ:VKTX), Janux Therapeutics, Inc. (NASDAQ:JANX), and Alpine Immune Sciences, Inc. (NASDAQ:ALPN) have all delivered triple digit percentage returns year to date in 2024. Interestingly, not only are all of these stocks mid cap stocks, but they are also biotechnology firms. This allows them to collectively demonstrate the strong potential of the biotech sector, which always lures investors to pile in millions of dollars in research and development with the hopes of a proper payout in terms of share price performance should treatments secure regulatory clearance and patient adoption. To take a look at some mid and small cap biotechnology stocks that hedge funds are also buying, you can take a look at the 13 Best Biotech Stocks To Buy Under $20.
Shifting gears, the start of the second quarter of 2024 has seen investors shift their expectations for the Federal Reserve's interest rate cuts. Heading into the year and throughout Q1 2024, Wall Street was focused on artificial intelligence, and investors were optimistic about early rate cuts as well. However, inflation data for March and the strong performance of the labor market have shifted expectations and now, most folks expect fewer rate cuts in 2024. At the same time, with April 2024 coming to an end, AI darling NVIDIA Corporation (NASDAQ:NVDA) has a lot to prove too. While not a mid cap stock, NVIDIA's shares are up by 58% year to date and a stunning 421% since the start of 2023. Yet, the stock dropped by 10%, in a silent loss of $280 billion of market value that took place on the same trading day.
So what happened to NVIDIA's shares? Well, it was due to nothing that Jensen Huang or his team did. Instead, NVIDIA's shares appeared to have lost 10% of their value due to peer and rival Super Micro Computer, Inc. (NASDAQ:SMCI) breaking from tradition and not issuing a preliminary financial report for its Q1 2024 performance. It appears that Wall Street is quite jittery, and investors are eager to position themselves for any untoward financial news in the Q1 2024 earnings season as they adjusted their portfolios well in advance of any official numbers from Super Micro. This adjustment appears to have taken place for NVIDIA as well and shone the spotlight even brighter on the upcoming earnings of the Santa Clara, California based semiconductor designer Advanced Micro Devices, Inc. (NASDAQ:AMD).
With these details in mind, let's take a look at some of the most oversold stocks. A couple of names are McGrath RentCorp (NASDAQ:MGRC), VinFast Auto Ltd. (NASDAQ:VFS), and PowerSchool Holdings, Inc. (NYSE:PWSC).
11 Oversold MidCap Stocks To Buy Now
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Our Methodology
For our list of the most oversold mid cap stocks to buy, we selected mid cap stocks with the lowest Relative Strength Index (RSI) readings and average analyst rating of Buy or better.
For these oversold mid cap stocks we used hedge fund sentiment. 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.
PagSeguro Digital Ltd. (NYSE:PAGS) is a Brazilian digital payments company headquartered in Sao Paulo, Brazil. It enables customers to avail of traditional banking services and manage their payments. The shares are rated Buy on average, and the average analyst share price target is $15.84.
By the end of December 2023, 25 out of the 933 hedge funds tracked by Insider Monkey were the firm's shareholders. Steve Cohen's Point72 Asset Management owned the biggest stake in PagSeguro Digital Ltd. (NYSE:PAGS) which was worth $136 million.
PagSeguro Digital Ltd. (NYSE:PAGS) joins VinFast Auto Ltd. (NASDAQ:VFS), McGrath RentCorp (NASDAQ:MGRC), and PowerSchool Holdings, Inc. (NYSE:PWSC) in our list of the oversold mid cap stocks.
Azenta, Inc. (NASDAQ:AZTA) is a small medical science company headquartered in Burlington, Massachusetts. It enables laboratories and diagnostics professionals to run their daily tasks. It's been relatively quiet on the news front for Azenta, Inc. (NASDAQ:AZTA), with the only relevant announcement being a new sample storage and management platform announced earlier this year.
As of Q4 2023 end, 21 out of the 933 hedge funds part of Insider Monkey's database had bought and owned Azenta, Inc. (NASDAQ:AZTA)'s shares. Quentin Koffey's Politan Capital was the largest shareholder due to its $298 million stake.
First Industrial Realty Trust, Inc. (NYSE:FR) is a real estate investment trust headquartered in Chicago, Illinois. Its shares are down by 12% over the past month, with the latest bit of bad news coming in the form of the first quarter of 2024 earnings that saw First Industrial Realty Trust, Inc. (NYSE:FR) miss analyst funds from operations (FFO) estimates.
During December 2023, 27 out of the 933 hedge funds profiled by Insider Monkey were the firm's shareholders. Charles Fitzgerald's V3 Capital owned the biggest First Industrial Realty Trust, Inc. (NYSE:FR) stake that was worth $61.5 million.
8. WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC)
Number of Q4 2023 Hedge Fund Shareholders: 27
Latest RSI Score: 21.45
WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC) is another real estate firm. It offers storage and office workspace in the U.S., Canada, and Mexico. It's also the first stock on our list that is rated Strong Buy on average with an average analyst share price target of $53.40, despite the troubles underway in the office real estate market.
Insider Monkey dug through 933 hedge fund holdings for their fourth quarter of 2023 shareholdings and found that 27 had invested in WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC). Leon Cooperman's Omega Advisors owned the biggest stake which was worth $132 million.
10x Genomics, Inc. (NASDAQ:TXG) is a healthcare technology company whose products enable genetic testing. The fact that its stock is down by a whopping 49% year to date is unsurprising given that 10x Genomics, Inc. (NASDAQ:TXG) has missed analyst EPS estimates in all four of its latest quarters.
As part of their December 2023 investment portfolios, out of the 933 hedge funds surveyed by Insider Monkey, 30 were the firm's shareholders. 10x Genomics, Inc. (NASDAQ:TXG)'s largest stakeholder among these is Catherine D. Wood's ARK Investment Management due to its $226 million investment.
Legend Biotech Corporation (NASDAQ:LEGN) is a mid sized biotechnology company headquartered in Somerset, New Jersey. Its shares are down by 12% year to date but analysts continue to be optimistic as they have rated the shares as Strong Buy on average and set an average share price target of $86.16.
34 out of the 933 hedge funds profiled by Insider Monkey during Q4 2023 had invested in Legend Biotech Corporation (NASDAQ:LEGN). Peter Kolchinsky's RA Capital Management owned the biggest stake which was worth $376 million.
McGrath RentCorp (NASDAQ:MGRC), Legend Biotech Corporation (NASDAQ:LEGN), VinFast Auto Ltd. (NASDAQ:VFS), and PowerSchool Holdings, Inc. (NYSE:PWSC) are some oversold midcap stocks with hedge fund and analyst interest.
