3 Top Mid-Cap Stocks to Buy Right Now
Like the awkward age between youth and adult, mid-cap stocks are caught between the excitement of their small-cap brethren and the potential they represent, and large caps with their general time-tested support and security.
Yet there are still plenty of mid-cap stocks that can give investors plenty growth along with the relative safety of market acceptance. iRobot (NASDAQ: IRBT), Upwork (NASDAQ: UPWK), and Boyd Gaming (NYSE: BYD) are three such stocks that can give investors the best of both worlds.
A beaten-down stock with big upside potential
In Q1, revenue grew by 9% year over year to $237.7 million, but the company's operating expenses grew by almost as much: 7%. However, there's a very good reason for iRobot's increased expenses. The company is developing a robotic lawn mower called the Terra t7 and another new as-yet-unnamed device for release later this year. These will join the company's new high-end vacuum, the Roomba s9+, and its new robotic mop, the Braava jet m6, both of which were released in May.
With smart-home systems becoming more and more widespread, the demand for smart-home-compatible devices like iRobot's latest models should increase exponentially. While iRobot has a dominant share of the robotic vacuum market, it -- and robotic vacuums in general -- controls less than 25% of the high-end vacuum market. Put together, this adds up to a lot of opportunity for iRobot, regardless of whether a single quarter measures up to Wall Street's expectations.
With the stock now trading at a 30% discount to its recent 2019 highs, now is a fantastic time to consider picking up some shares.
A second chance to buy a market leader in a growing industry
Despite the temporary setback, Upwork's long-term drivers remain in place. While concerns that America is becoming a gig-only economy (contractors, temps, etc.) appear to be overstated as only 10% depend on gigs as their primary income, a study from Cornell University and Aspen Institute found that approximately 30% of our workforce participates in a gig-employment arrangement. The remainder do so in addition to their primary jobs, or to use millennial parlance, as a "side hustle."
Whether it's supporting workers who depend on gigs as their primary job or those side hustling for extra income, Upwork is well-situated to take advantage of this growing trend. As the largest freelancing website, Upwork's
Betting on a gaming rebound
Although it operates nine casinos in Las Vegas, its off-strip locations catering to locals (it also has three facilities in downtown Las Vegas) are benefiting from much stronger support. It also has casinos in nine other states, giving it broad geographic diversity that's been bolstered by its growth-by-acquisition strategy; only one of its properties didn't see growth in the quarter.
Boyd has also had one of the biggest sportsbook operations in Nevada, and through its partnership with FanDuel, one of the biggest sportsbooks in New Jersey, which just surpassed Nevada in May as the biggest sports betting arena in the country, it is seeking to replicate that success as nearby Pennsylvania builds out its sports gambling business.
Shares of Boyd are down 21% over the past 12 months (but they're up 30% in 2019), which means its enterprise value is trading at just 10 times its earnings before interest, taxes, depreciation, and amortization, more than Penn, which goes for around 8.8 times EBITDA, but with arguably better growth prospects.
With more opportunities open to it, facilities spread out geographically that should protect its downside, and access to the better-situated locals market in Las Vegas, Boyd Gaming is a mid-cap casino stock you may just want to bet on.
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