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8 Growth Stocks to Buy Before a Long-Awaited Breakout: Oppenheimer

8 Growth Stocks to Buy Before a Long-Awaited Breakout: Oppenheimer
8 Growth Stocks to Buy Before a Long-Awaited Breakout: Oppenheimer

The widely followed S&P 500 and Nasdaq 100 indices are trading at all-time highs, while the small-cap-focused S&P 600 and mid-cap-focused S&P 400 have made little progress since the end of 2021. These two smaller indices appear to be stuck, having failed to hit new cycle highs since March.

Large caps could lead for a while yet, Oppenheimer researchers wrote in a July 9 note. The firm, which just made its year-end target for the S&P 500 the second-highest on Wall Street, said it continues to favor larger stocks over mid caps, which it in turn prefers to smaller companies.


Oppenheimer SMID capacitors

Oppenheimer



However, SMID caps have been quietly but steadily gaining momentum throughout the year, even if they have yet to break through. Oppenheimer noted that from a technical perspective, small and mid-cap stocks have a clear long-term uptrend, suggesting a breakout is imminent.

“Each of these unconfirmed averages is above the previous breakout levels and their 200-day moving average,” wrote the Oppenheimer researchers. “This leads us to favor a bullish resolution to their year-to-date range.”

Among SMID caps, Oppenheimer is particularly bullish on mid-cap growth stocks. While their mega-cap peers have been all the rage, the firm expects the less flashy group to take the reins and lead the way during the next phase of the market rally, possibly as early as the next few months.

“Mid-cap growth remains our top rotation idea,” wrote Oppenheimer researchers. “We believe it strikes an attractive balance between long-term growth leadership and medium-term rotation potential in lower-cap stocks.”


Oppenheimer SMID Cap Growth

Oppenheimer



8 stocks to buy for strong growth

The bulls at Oppenheimer have long been fans of SMID caps and keep a running list of the companies valued between $1 billion and $10 billion that most excite their analysts.

The list of 25 SMID Outperform-rated stocks for this quarter is similar to last quarter’s list, but with some notable changes. Business Insider reviewed both lists and found that eight companies in the July basket were not listed in April.

Below are the eight SMID-cap stocks that Oppenheimer is bullish on as they stand to benefit from growth themes, with ticker, market cap, sector, growth theme, price target and percentage upside to that target, as well as select commentary on each stock. Four of the companies – Arcosa, Blueprint Medicines, Sweetgreen and Zeta Global – also have bullish technicals.

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