6 Top Stocks That Turned Large Cap From Mid Cap Amid Pandemic

Wall Street had entered into the bear market six months ago owing to the global outbreak of the deadly coronavirus. The Dow trickled down to bear territory on Mar 11 and was joined by the S&P 500 and the Nasdaq Composite a day later. The market's downtrend continued till Mar 23 when all the three major stock indexes plummeted to their recent troughs.

Wall Street has witnessed a V-shaped recovery since Mar 23, which helped it to exit the coronavirus-induced short bear market and form a new bull market. This impressive turnaround was predominantly driven by the astonishing growth of the large-cap technology stocks.

However, a closer look into the market reveals that apart from large-cap stocks, mid-caps too contributed significantly to the market's turnaround.

Despite facing market turmoil in the first week of September, the three large-cap centric indexes — the Dow, the S&P 500, and the Nasdaq Composite — have rallied 51.2%, 52.3%, and 64.7%, respectively, so far since Mar 23. Likewise, the mid-cap specific S&P 400 Index appreciated 57.1% during the same period.

Meanwhile, in the due course of the S&P 400 Index's fabulous performance in the past five and half months, several mid-cap companies (market capital > $1 billion but < $10 billion) have become large caps (market capital > $10 billion).

We have selected six of these that carry a favorable Zacks Rank. All these stocks had market capital in the range of  $4 billion to $8 billion during Mar 11 - 12, when Wall Street entered the bear market. At present, the market capital of these stocks are in the range of  $11 billion to $25 billion.

Mid-Cap Stocks With Growth Potential

Investment in mid-cap stocks is often recognized as a good portfolio diversification strategy. These stocks combine the attractive attributes of both small and large-cap stocks.

If the economic impacts of coronavirus are more severe ahead, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to less international exposure.

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