Mid-cap stocks are a nice place to look when an investor wants modest risk and attractive rewards. Mid-cap stocks are typically classified as those that have a market cap ranging between $1 billion and $10 billion.
Generally, these are already established businesses with an established record. They aren’t dependent on one customer, and they tend to be geographically diversified. Yet, these companies can still have substantial runways to grow in the years ahead. A mid-cap stock can still multiply many times over.
If you have $2,800, here are four mid-cap stocks to drop $700 into each.
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MDA: A mid-cap stock soaring to the moon?
With a stock price of $26.15, MDA Space (TSX: MDA) has a market cap of $3.2 billion. The space economy is a rapidly growing sector. Communication, data, the internet, logistics/transportation, weather, and defence are all sectors that rely on space for some component of their operations.
MDA has become a critical and leading component provider to the space industry. In many instances, it is one of the only integrated suppliers that can do what it can do.
In the past few years, its backlog has rapidly scaled. Its current $4.8 billion backlog should support several years of double-digit growth. Its stock has recently pulled back, so it could be an attractive time to add this mid-cap stock.
Aritzia
Aritzia (TSX: ATZ) has a price of $65.51 and a market cap of $7.5 billion. This stock can be very volatile. Its stock is up 55% in the past month. As a result, I would not be a buyer here. However, if it were to pull back on any future tariff or trade war worries, it could be interesting.
Aritiza offers an exceptional line of brands, boutiques, and clothing. It seems to have the right mix of lines, quality, and newness that really appeal to its consumers.
The company has gained strong traction in the U.S. That should continue to be a major growth driver for many years, even before it starts to expand internationally. The company has a very strong, cash-rich balance sheet, which gives it the flexibility to grow and remain economically resilient.
Trisura Group
Trisura Group (TSX: TSU) trades for $37.84 per share. That equates to a $1.8 billion market cap. It provides specialty and fronting insurance solutions in the United States and Canada. It has a dominant market position in Canada, and it is quickly growing in America.
The company has been in build mode for the past few years. Those investments are set to start paying off in 2025 and beyond.
It may take time, but if Trisura can execute, there could be attractive upside. This mid-cap stock is cheap when compared to other specialty insurance peers.
TFI International: A mid-cap turnaround stock if you have the stomach for it
Another stock that recently got relegated to mid-cap land is TFI International (TSX: TFII). It trades for $125 with a market cap of $10.5 billion. It fell from grace after a slough of bad earnings results drew the stock down.
While that is hardly an investment thesis, TFI is a business with good bones. Its roots are in a smart serial acquisition strategy. It has a highly invested management team who know how to right-size businesses. Lastly, its core transportation assets are good.
Management has some work to do to clean up operations. However, when the freight recession abates, they should be more efficient than ever. As a result, shareholders could be in for a nice bounce. That may take time, but the stock is relatively cheap today. This is a higher-risk/higher-reward situation in this mix.
