What Is a Mid-Cap Value Stock?

A mid-cap value stock has been identified by industry analysts as a good choice for value investors at its current price per share. Mid-cap indicates that it is ꦯa moderate-sized company in terms of its total market capitalization.

How Mid-Cap Value Stocks Work

Given the vast number of stocks, investors use a variety of methods to categorize and make sense of the opportunities available to them🅺.

One of the most common categories used by investors is company size. Anothe⛄r is the investment strategy that they seem best suited to address.

Market Capitalization

Companies are typically categorized by their total market capitalization. This is simply its cur🌺rent share price multiplied by the number 🔯of outstanding shares of the stock.

They can then be categorized as 澳洲幸运5官方开奖结果体彩网:large-cap, mid-cap, or 澳洲幸运5官方开奖结果体彩网:small-cap stocks. Some investors using additional terms such as mega-cap and 澳洲幸运5官方开奖结果体彩网:micro-cap to refer to especially large and small❀ companies.

Investment Style

The issue of investment style is more relevant to the strategy of the potential investor than to the stock. Investors generally distinguish between the strategies of value investing and gro💛wth investing. 

Value investors aim to buy shares of stocks that are selling at less than their 澳洲幸运5官方开奖结果体彩网:intrinsic value—that is, for less than they are worth.  Of course, individual investors differ in their assessments of i👍ntrinsic value as well as in their methods for arriving at this conclusion.

Common examples of valuation methods used by value investors include 澳洲幸运5官方开奖结果体彩网:financial ratios such as the 澳洲幸运5官方开奖结果体彩网:price-to-earnings (P/E) and 澳洲幸运5官方开奖结果体彩网:price-to-book-value (P/B) ratios; 澳洲幸运5官方开奖结果体彩网:discounted cash-flow analysis (DCF), and qualitative ass🧸essments of a company’s competitive advantages.

Growth investors, meanwhile, are more concerned with the future prospects of a company as ✅well as its current momentum in market trading. Companies that are perceived to have growth prospects might benefit from favorable tailwinds, as investor enthusiasm encourages a growing pool of investors to bid up the share price. In some cases, special circumstances such as an upcoming product launch or an unexpected earnings beat could feed enthusiasm among growth investors.

Combining Mid-Cap and Value

With this in mind, a mid-cap value stock is𒊎 a stock that is appealing to value investors and is of middling size based on its market 🐬capitalization.

As a general rule, larger companies will tend to have greater coverage by analysts and the media. All that attention means they may be lesꦬs likely to have a big difference between market price and intrinsic value.

For this reason,♌ many value investors believe that the best investment opportunities are generally found among small and mid-cap value sto𓃲cks.

Example of a Mid-Cap Value Stock

Investors who want to gain exposure to mid-cap value stocks have several methods at their disposal. Those who are willing and able to conduct their own research can search for companies manually using tools such as 澳洲幸运5官方开奖结果体彩网:stock screeners. 澳洲幸运5官方开奖结果体彩网:Passive investors can also rely on third-party indexes, mutual funds, and exchange-traded funds (ETFs) which will allow them t🤪o invest in a diversified portfolio of mid-cap value stocks using a single investment vehicle.

One popular example of a mid-cap value stock investment is the Mid-Cap Value Index Fund Admiral Shares offered by Vanguard. Trading under the ticker symbol VMVAX, its ten largest holdings as of Q1 2021 included:

1. Occidental Petroleum Corp.
2. Valero Energy Corp.
3. Nucor Corp.
4. Corteva Inc.
5. Welltower Inc.
6. Dollar Tree Inc.
7. Motorola Solutions Inc.
8. Kroger Co.
9. Arthur J. Gallagher & Co.
10. Consolidated Edison Inc.