their impressive bull run with just 15 days of trading left to
complete 2021. The resurgence of coronavirus in the form of either
Delta or Omicron variant and high inflation resulting from
prolonged global supply-chain disruptions, labor shortage and
massive pent-up demand failed to deter markets’ northbound journey.
Moreover, it seems that a shift in the Fed’s monetary
policies toward a likely hawkish stance has already been
At this stage, it will be fruitful
to invest in mid-cap stocks with a favorable Zacks Rank that are
available at attractive valuations. While several such stocks are
available, we have selected
A Solid 2021 So Far for Mid
Year to date, the mid-cap-centric
S&P 400 Index has climbed 20.4%. The large-cap-specific Dow,
S&P 500 and Nasdaq Composite – have rallied 16.8%, 24.3% and
20.4%, respectively. The small-cap-specific Russell 2000 and the
S&P 600 have advanced 12.4% and 23.1%, respectively. Clearly,
mid-cap stocks are star performers in 2021.
Investment in mid-cap stocks is
often recognized as a good portfolio diversification strategy.
These stocks combine the attractive attributes of both small and
large-cap stocks. Top-ranked mid-cap stocks have a high potential
to enhance their profitability, productivity and market share.
If the economic impacts of
coronavirus are more severe ahead, mid-cap stocks will be less
susceptible to losses than their large-cap counterparts owing to
less international exposure. On the other hand, if the crisis
doesn’t worsen due to vaccination, these stocks will gain more than
small caps due to established management teams, a broad
distribution network, brand recognition and ready access to the
point, the economy is very strong and inflationary pressures are
higher, and it is therefore appropriate in my view to consider
wrapping up the taper of our asset purchases, which we actually
announced at the November meeting, perhaps a few months
This means that the Fed strongly
believes that the fundamentals of the
consumer spending and business spending are strong despite mounting
inflation and supply-chain disruptions. Manufacturing and services
PMIs have stayed elevated. The struggling labor market is also
showing a systematic recovery.
In its latest projection on
the Atlanta Fed reported that the
in fourth-quarter 2021.
first, second and third quarters of this year, respectively.
to the previously approved funds of
Total spending may go up to
to eight years. The infrastructure development project will be a
major catalyst for the
and climate bill proposed by the Biden administration. The bill
will now head toward the
of components vital to many industries.
Our Top Picks
We have narrowed our search to five
mid-cap (market capital >
that are currently available at deep discount. These stocks have
strong growth potential for the rest of 2021 and witnessed positive
earnings estimate revisions in the last 30 days. Each of our picks
carries a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s
The chart below shows the price
performance of our five picks year to date.
Kohl’s is benefiting from its growing digital
business amid pandemic-led customers’ increased shift to online
shopping. KSS is also benefiting from its strategic framework,
which focuses on driving top-line growth, expanding operating
margin, implementing disciplined capital management as well as
undertaking an agile, accountable and inclusive culture. Kohl’s
strong brand portfolio and partnerships are driving growth.
Kohl’s is emphasizing strategic
efforts to transform it into a leading destination for active and
casual lifestyle items. KSS has raised its view for the current
fiscal year and expects sales to increase in the in the
mid-twenties percentage range compared with the earlier
anticipation of growth in the low-twenties percentage rate.
Kohl’s has an expected earnings
growth rate of more than 100% for the current year (ending
improved 21.1% over the last 30 days. KSS is currently trading at a
discount of 21.8% from its 52-week high.
management, and water services and operations businesses. TPL’s
acres of land in the
revenue from pipeline, power line and utility easements, commercial
leases, material sales and seismic and temporary permits related to
land uses including midstream infrastructure projects and
hydrocarbon processing facilities.
TPL has an expected earnings growth
rate of 58.4% for the current year. The Zacks Consensus Estimate
for current-year earnings improved 4.5% over the last 30 days.
its 52-week high.
Harley-Davidson is focusing on motorcycle models
and technologies that better align with market trends. HOG’s
turnaround plan, dubbed as ‘Rewire’, and the five-year strategic
model and organizational structure have improved effectiveness
across all functions.
HOG’s decision to evolve its
original LiveWire motorcycle into a dedicated electric vehicle
brand is set to bolster prospects. The popularity of Grand American
Touring motorcycles and successful launches of Pan American and
Sportster S. augurs well for the company’s top-line growth.
Harley-Davidson has an expected
earnings growth rate of more than 100% for the current year. The
Zacks Consensus Estimate for current-year earnings improved 0.6%
over the last 30 days. HOG is currently trading at a discount of
28.9% from its 52-week high.
Dillard’s operates retail department stores in the
southeast, southwest and Midwest areas of
gained from the continued momentum in consumer demand, which
somewhat offset global supply-chain issues, including shipping
delays and disruptions in the transportation network.
Strength in children’s apparel as
well as men’s wear and accessories bode well for Dillard’s.
Improved consumer demand and better inventory management by DDS led
to lower markdowns, which boosted gross margin. Lower payroll
expenses resulted in operating expense deleverage.
Dillard’s has expected earnings
growth of more than 100% for the current year (ending
improved 20% over the last 30 days. DDS is currently trading at a
discount of 36.5% from its 52-week high.
mix of crude and its access to some of the fastest growing domestic
markets is a real strength. HFC’s exposure to the more stable cash
flows from logistics segment diversifies earnings stream and offers
a buffer against the volatile refining business.
Ample cash, an undrawn
are other positives in the
is poised for significant capital appreciation and is viewed a
preferred downstream energy operator to own now.
growth of more than 100% for the current year. The Zacks Consensus
Estimate for current-year earnings improved 3.7% over the last 30
days. HFC is currently trading at a discount of 23.3% from its
5 Stocks Set to Double
Each was handpicked by a
to gain +100% or more in 2021. Previous recommendations have soared
+143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under
radar, which provides a great opportunity to get in on the ground
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