U.S. markets have moved mostly sideways so far in March after rallying strongly in the first two months of 2024. Market participants are waiting for the Fed FOMC meeting to be held on Mar 19-20. Although no rate cut is expected, investors will keenly watch the Fed Chairman’s post-FOMC statements.

Large-cap stock indexes such as the Dow, the S&P 500 and the Nasdaq Composite have shown mixed performance so far in March. Month to date, the mid-cap benchmark — the S&P 400 Index — is up 2.2%.

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. Top-ranked, mid-cap stocks have a high potential to enhance their profitability, productivity and market share. These may also become large caps over time.

If economic growth slows down due to any unforeseen internal or external disturbance, mid-cap stocks will be less susceptible to losses than their large-cap counterparts owing to less international exposure.

On the other hand, if the economy continues to thrive, these stocks will gain more than small caps due to established management teams, a broad distribution network, brand recognition and ready access to capital markets.

Our Top Picks

We have narrowed our search to five mid-caps (market capital > $5 billion, < $10 billion) that have strong potential for 2024. These stocks have seen positive earnings estimate revisions in the past 60 days. Each of our picks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The chart below shows the price performance of our five picks year to date.

Image Source: Zacks Investment Research

MSA Safety Inc. MSA is engaged in the development, manufacture and supply of safety products that protect people and facility infrastructures. MSA’s core product lines include self-contained breathing apparatus, fixed gas and flame detection systems, handheld gas detection instruments, industrial and fire service head protection products and fall protection devices. MSA serves a broad range of industries, including the oil, gas and petrochemical industry, the fire service, construction, mining and general industry.

MSA Safety has an expected revenue and earnings growth rate of 5.1% and 10%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.3% over the past 30 days.

Allison Transmission Holdings Inc. ALSN achieved record sales in 2023 primarily on robust demand from the North America On-Highway end market. ALSN expects strong results from the unit this year as well. For the full year, Allison Transmission envisions record total sales in the range of $3.05-$3.15 billion, up from $3.03 billion generated in 2023.