Buy 5 Mid-Cap Stocks Poised to Turn Into Large Caps in 2025

Group 1: Market Overview - U.S. stock markets have shown renewed momentum in 2024 following a strong performance in 2023, with a bull run lasting 21 months, excluding minor fluctuations [1] - Market participants anticipate a 70% chance of a 25 basis points rate hike by the Fed in December, which could lead to a 1% reduction in the benchmark lending rate in 2024 [1] Group 2: Mid-Cap Stocks Performance - The S&P 400 index, focused on mid-cap stocks, has rallied 21.4% year to date, indicating strong performance in this segment [2] - Five mid-cap stocks with potential to transition to large-cap status by 2025 include MACOM Technology Solutions Holdings Inc. (MTSI), Masimo Corp. (MASI), Leonardo DRS Inc. (DRS), Ingredion Inc. (INGR), and Carpenter Technology Corp. (CRS) [2] Group 3: Investment Rationale for Mid-Cap Stocks - Mid-cap stocks are recognized for their portfolio diversification benefits, combining attributes of both small and large-cap stocks, with high potential for profitability and market share growth [3] - In a slowing economy, mid-cap stocks are less vulnerable to losses compared to large-cap stocks due to lower international exposure [4] - Conversely, in a thriving economy, mid-cap stocks are expected to outperform small caps due to established management, broad distribution networks, brand recognition, and access to capital markets [4] Group 4: Company-Specific Insights MACOM Technology Solutions Holdings Inc. (MTSI) - MTSI is experiencing strong momentum across telecom, data center, and defense markets, driven by 5G deployments and demand for RF and microwave products [6][7] - Expected revenue and earnings growth rates for MTSI are 22.5% and 31.3%, respectively, for the current year ending September 2025, with a 3.7% improvement in earnings estimates over the last 30 days [8] Masimo Corp. (MASI) - MASI focuses on patient monitoring and has a strong product suite supported by ongoing R&D efforts, enhancing its global business presence [11] - Expected revenue and earnings growth rates for MASI are 6.1% and 12.8%, respectively, for the next year, with a 0.2% improvement in earnings estimates over the last seven days [12] Leonardo DRS Inc. (DRS) - DRS provides defense electronic products and systems, with a focus on advanced sensing and military support services [15] - Expected revenue and earnings growth rates for DRS are 7.4% and 16.9%, respectively, for the next year, with a 0.9% improvement in earnings estimates over the last seven days [16] Ingredion Inc. (INGR) - INGR specializes in nature-based sweeteners and nutrition ingredients, serving various sectors including food and pharmaceuticals [19] - Expected revenue and earnings growth rates for INGR are 1.3% and 6.1%, respectively, for the next year, with a 3.7% improvement in earnings estimates over the last 30 days [20] Carpenter Technology Corp. (CRS) - CRS has a strong backlog indicating high demand and is positioned to benefit from ongoing momentum across its end-use markets [22][23] - Expected revenue and earnings growth rates for CRS are 6.9% and 42.2%, respectively, for the current year ending June 2025, with a 2% improvement in earnings estimates over the last seven days [25]