The appeal of mid-cap stock investing is obvious to smart investors. Mid-caps are not as widely followed by analysts or retail investors as their large-cap counterparts are. Company and product news travels a bit slower, and lower trading volumes mean less efficient market pricing mechanisms. The result for investors who know where to look is that undervalued stocks at bargain prices are more plentiful and easier to find in the mid-cap universe.
Also, by definition, mid-caps are smaller than their large-cap counterparts and therefore have more theoretical room to grow. Mid-cap stocks are often younger companies with innovative products and ideas. When they do grow, they can grow very fast. At the same time, they are more established than small-cap stocks and should therefore carry less risk.
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As for the technology sector, it’s been one of the most dynamic and profitable sectors of the economy for the last 25 years. It follows that mid-cap tech stocks have tremendous potential for big gains that, when they happen, can happen quickly. Here are six of the best mid-cap tech stocks to buy now:
— Alarm.com Holdings Inc. (ticker: ALRM)
— Ciena Corp. (CIEN)
— nCino Inc. (NCNO)
— CorVel Corp. (CRVL)
— Insight Enterprise Inc. (NSIT)
— Rambus Inc. (RMBS)
Alarm.com Holdings Inc. (ALRM)
ALRM provides hardware and software solutions to owners and operators of apartment buildings and other commercial property. It specializes in modernizing and upgrading building security systems by making systems wireless, connecting them to the internet and bringing their most important functions online.
Alarm Holdings offers comprehensive security solutions to its clients. The hardware component of its business includes video cameras, thermostats, doors, locks, lighting and smart doorbells, along with computers, monitors, servers and phones. The software used to run and coordinate its system is offered on a subscription basis, which secures ongoing revenue streams for the company.
The housing shortage and high mortgage rates are contributing to a boom in residential rental property, and security has never been more important or more necessary. ALRM provides investors with the unique opportunity to benefit from three popular themes: the strength in the apartment sector, the heightened awareness of security and the growth potential in high-tech firms.
Ciena Corp. (CIEN)
CIEN is a communications technology company. More specifically, it provides video, data and voice traffic networking systems through optical networks worldwide. The company offers both hardware and software solutions, and it generates more than $4 billion in annual revenue.
The company’s flagship product is its popular Blue Planet Intelligent Automation Software. This innovative software helps companies and their communication service providers seamlessly introduce and integrate new products and services on their various platforms and systems, thus shortening the adaptation and distribution processes.
Earlier in December, Bank of America reiterated its “buy” rating on the stock, noting healthy spending by North American businesses on communication software and good growth potential in India.
nCino Inc. (NCNO)
NCNO is a fintech, or financial technology, company. It offers cloud-based software to banks and other lenders that streamline commercial mortgage lending and other banking processes. Its clients include large commercial banks, smaller regional banks, credit unions and financial institutions across the globe.
The purpose of its products and services is to digitize and automate as much of the lending and banking process as possible, and to do it all in the cloud. The firm’s nCino IQ Application Suite manages the entire lifecycle of a banking customer from beginning to end, with special emphasis on complying with all applicable laws and regulations.
Banking software applications are a $30 billion industry, and NCNO is well positioned to gain market share in this area. What makes this company unique among its competitors is that it is a pioneer in cloud-based information processing and storage.
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CorVel Corp. (CRVL)
Although CRVL has a modest market cap of just over $4 billion, the company is emerging as a strong player in the workers’ compensation, business liability and health insurance fields. The reason it’s being included in a list of tech stocks is because of its comprehensive use of information technology (IT), artificial intelligence (AI), machine learning and language processing to manage customer care and service. CRVL is essentially a network solutions service provider that applies its efforts to insurance services.
CRVL saves clients money by using advanced technology to improve efficiencies surrounding insurance costs, including payment integrity. The company recently reported that its revenues for the third quarter of 2023 came in at $196 million, which is an 11% increase over the same quarter last year.
The ever-increasing cost of business and health insurance creates a large and growing market for exactly the high-tech services CRVL provides.
Insight Enterprise Inc. (NSIT)
NSIT operates globally, providing IT and cloud-computing services to its clients, which are mostly schools, hospitals and government entities. The company is heavily involved in moving its clients’ platforms and processes into the cloud and helping them integrate AI solutions into their business and service functions.
Insight seeks to be a one-stop shop for its clients. The company can provide customers with all the necessary hardware to complement their software, and it can help with almost all aspects of IT.
Most of the company’s $9.3 billion in annual sales come from North America, but the firm does a substantial amount of business in Europe, the Middle East, Africa and Asia.
In a recent research note, Barrington Research raised its 2023 earnings per share expectations and reiterated an “outperform” rating for NSIT stock.
Rambus Inc. (RMBS)
The semiconductor industry is one of the most important lines of business on earth. The demand for semiconductors, or chips, seems to know no limits. Almost every product consumers buy today — from phones to televisions to automobiles — contains multiple microchips. RMBS is a prominent mid-cap name in that massive global business.
RMBS isn’t content to simply manufacture chips to order. Instead, the company is on the cutting edge of semiconductor engineering. Its most popular products are memory interface chips, security IP chips and interface IP chips. The company is expected to generate $556 million in revenue this year, a number analysts expect to grow more than 14% to hit $637 million in 2024.
Another thing to keep in mind is that the U. S. has made a substantial investment in the semiconductor industry through the 2022 CHIPS and Science Act. Conceivably, this long-term commitment by the federal government could benefit RMBS, which — although it does business around the world — is based in Sunnyvale, California.
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6 Best Mid-Cap Tech Stocks to Buy Right Now originally appeared on usnews.com
