2 Mid-Cap Stocks Flashing Buy Signals When we asked if you would like more small-cap stock coverage, we received an enthusiastic “yes.” But we also had requests to review mid-cap stocks as well. Companies with market caps between $2 billion and $10 billion are generally categorized as mid-cap stocks. They serve as a happy medium between small-cap and large-cap stocks. A small-cap company may be just starting out or just starting to ramp up its monetization, which means it can provide massive quarter-over-quarter (QoQ) and year-over-year (YoY) revenue growth that excites the financial news talking heads, whipping everyone into a buying frenzy and sending the stock price higher. But the downside is that small-cap companies have yet to provide consistent returns, and there’s always the chance that they’ll never successfully execute the jump into mid-cap or large-cap territory. On the other hand, large-cap companies have already proven that they are capable of generating significant revenue. Although every investment carries some degree of risk, the stocks of large-cap companies tend to be more stable and consistent. These companies have proven that they offer products and services that people want, and their track record of success makes shareholders feel more confident than they would with a company that is still proving itself. But because the company already has so many customers, it can’t increase revenue by a triple-digit percentage like it may have in its earlier years. And because the stock market is a forward-looking beast, even moderate increases in revenue can be viewed as a disappointment that keeps the stock price of a large-cap stock stagnant or even sends it lower. RECOMMENDED LINK Mark your calendar [big payday incoming?] On Monday it's happening… If you want to potentially make a lot of money, faster than you imagined… You need to mark your calendar for Monday, (Jan. 9th, 2023) because this trade could pay you as much as $1,040. To get all the details, click here now. But hurry, there's only a few days left to get in. With mid-cap stocks, you have a bit of the best of both worlds. A company with a mid-cap stock has proven that it knows how to sell its products and monetize them, making it more mature and consistent than a small-cap company. But it also has more revenue growth potential than a large-cap company because it’s easier to double $3 billion in revenue than $100 billion, for example. One of the easiest ways to find mid-cap stocks you may not have heard of before is through an ETF, and with TradeSmith in your corner, you can see in an instant the health of the company and the risk levels associated with investing in that company. Out of the 402 holdings of the iShares Core S&P Mid-Cap ETF (IJH), 40% are in our Green Zone, offering a full page and a half of stocks our Health Indicator says are “buys.” While these are by no means the only stocks worth digging into, I wanted to share with you two stocks to save you time in your own research and offer new investable ideas. 2023 Mid-Cap Stock Opportunities Mid-Cap Stock No. 1: Jazz Pharmaceuticals PLC (JAZZ) Company Snapshot: Slipping into the mid-cap arena at just under $10 billion, Jazz Pharmaceuticals is a biotech company focused on neuroscience therapeutics and oncology therapeutics. In 2021, Jazz made a $7.2 billion blockbuster acquisition of GW Pharmaceuticals, the maker of Epidiolex, the first FDA-approved prescription cannabidiol medicine to treat seizures associated with various diseases in patients 1 year of age or older. Epidiolex sales totaled $463 million in 2021, and along with Jazz’s oncology franchises, are projected to reach $2.5 billion in sales as a part of the company’s Vision 2025 plan to reach $5 billion in revenue. Biotech firms are risky because of the expense (estimates range from $314 million to $2.8 billion) and time (between 10 and 15 years on average) it takes to bring a drug to market. But not only is Jazz generating revenue in the here and now, but between investigational drugs and ones being investigated for multiple uses, the company also has a pipeline of 29 preclinical and Phase 3 trials. Jazz saw a massive jump in its 2021 revenue from 2020, and keep in mind that the company expects to reach $5 billion in revenue in the next two years, a 61.81% increase from 2021. JAZZ has been in the Green Zone since Sept. 6, meaning that our Health Indicator considers the stock to have a healthy trading pattern. It has a medium-risk Volatility Quotient (VQ) of 27.62%. RECOMMENDED LINK The expert Barron's describes as visionary premieres a global "shockumentary" America's Energy Armageddon Discover how woke progressives played politics with the energy grid as part of a potential plot to "blackout" the U.S. economy in 2023… See firsthand who's being set up to prosper and who could be wiped out (FREE to stream!) Mid-Cap Stock No. 2: World Wrestling Entertainment Inc. (WWE) Company Snapshot: WWE was the first company we ever featured in the exclusive TradeSmith Daily series Special-Situation Central in August 2022, so I felt it was worth revisiting. As a fun side note, I got to know a legendary WWE wrestler: Diamond Dallas Page. A mutual friend introduced us because he thought we had a lot in common, so we had lunch together and realized we shared a lot of the same beliefs and principles about health and fitness. You can see us together doing his signature gesture, the “Diamond Cutter.” Getting back to investing, when asked in 2022 if the wrestling company would ever sell itself, current co-CEO Nick Khan said that while the company wasn’t actively pursuing any deals, he did say that it was “open for business” and that if somebody called, he would listen. Then, after former CEO Vince McMahon stepped down in July 2022, speculations ramped up that WWE could be an acquisition target for Amazon (AMZN), Netflix Inc. (NFLX), Walt Disney Co. (DIS), and a handful of other content providers looking to win over more customers in the streaming wars by offering unique and exclusive programming. Because there is no other company like this, it’s a once-in-a-lifetime opportunity for another company to own it. After all, it’s not every day that a company can acquire a content producer with such a massive viewership: WWE broadcasts its shows to more than 180 countries in 30 languages and 1 billion households each week. Netflix, Amazon, or Disney could offer a premium from the current stock price that is too good for WWE to turn down. But outside of being a potential acquisition target, WWE stands out on its own merit. WWE just had a strong Q3, hauling in $304.6 million in revenue, a 19% increase from the previous year. It also returned $9.1 million back to shareholders in the form of dividend payouts, and the stock currently offers a dividend yield of 0.65%. In addition, the company announced during its quarterly results that it was expanding the distribution of its content in Australia as well as expanding its NXT brand globally through the creation of NXT Europe. This continues to build upon the company’s moat of signature content and its ability to generate revenue from live wrestling events. While revenue growth was slow between 2019 and 2020, the company was still able to increase revenue by double digits from 2020 to 2021 even with COVID-19 cutting down on live events. And judging by its first three quarters, it looks like WWE is on pace to eclipse its 2021 revenue totals in 2022. As mentioned earlier, WWE is a Green Zone stock, and it has a medium-risk VQ of 26.75%. Enjoy your Wednesday, Keith Kaplan CEO, TradeSmith P.S. This year, let’s tilt the odds in our favor. I’ve discovered what I believe is the No. 1 income strategy for what the market is on track to deliver in 2023. It’s a new way to potentially make money with an astonishing win rate of 89.47%. Just one trade could put $1,000 or more in your account every time you execute it. And it has nothing to do with buying stocks, bonds, or cryptos. Click here for a quick over-the-shoulder demo of what could be the ultimate income solution. Watch in real time as I open my personal brokerage account and instantly pull $980 out of the markets. Best of TradeSmith The chart below represents the best-performing open positions over the last two years, as recommended by our software. More Investable Information at Your Fingertips TradeSmith's 2023 Guide to Beating Inflation Bitcoin Is Far from Dead (Here's Proof) This Could Be the Amazon of Gene-Editing Stocks Electric Vehicles Passed This 5% Tipping Point – Here Are 2 Investments to Make 866.385.2076 | support@tradesmith.com ©TradeSmith, LLC. All Rights Reserved. You may not reproduce, modify, copy, sell, publish, distribute, display or otherwise use any portion of the content without the prior written consent of TradeSmith. TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. 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