S&P 500   4,981.80
DOW   38,612.24
QQQ   425.61
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How major US stock indexes fared Wednesday, 2/21/2024
S&P 500   4,981.80
DOW   38,612.24
QQQ   425.61
Stock market today: Japan's benchmark briefly reaches all-time high after rally on Wall Street
AI Stock Caught Trading Under Secret Name (Ad)
Palo Alto Networks, Keysight fall; Garmin, Toll Brothers rise, Wednesday, 2/21/2024
Applied Materials stock is Ray Dalio's favorite in this new cycle
Dividend Expert Reveals His Biggest Income Secrets… Free of Charge (Ad)
Palo Alto Networks aims at cyber security leadership
Spotify sounding better to analysts as company tunes into profits
Better Than Oil Stocks (Ad)
3 Reasons the Capital One-Discover merger is a big deal
How major US stock indexes fared Wednesday, 2/21/2024
S&P 500   4,981.80
DOW   38,612.24
QQQ   425.61
Stock market today: Japan's benchmark briefly reaches all-time high after rally on Wall Street
AI Stock Caught Trading Under Secret Name (Ad)
Palo Alto Networks, Keysight fall; Garmin, Toll Brothers rise, Wednesday, 2/21/2024
Applied Materials stock is Ray Dalio's favorite in this new cycle
Dividend Expert Reveals His Biggest Income Secrets… Free of Charge (Ad)
Palo Alto Networks aims at cyber security leadership
Spotify sounding better to analysts as company tunes into profits
Better Than Oil Stocks (Ad)
3 Reasons the Capital One-Discover merger is a big deal
How major US stock indexes fared Wednesday, 2/21/2024
S&P 500   4,981.80
DOW   38,612.24
QQQ   425.61
Stock market today: Japan's benchmark briefly reaches all-time high after rally on Wall Street
AI Stock Caught Trading Under Secret Name (Ad)
Palo Alto Networks, Keysight fall; Garmin, Toll Brothers rise, Wednesday, 2/21/2024
Applied Materials stock is Ray Dalio's favorite in this new cycle
Dividend Expert Reveals His Biggest Income Secrets… Free of Charge (Ad)
Palo Alto Networks aims at cyber security leadership
Spotify sounding better to analysts as company tunes into profits
Better Than Oil Stocks (Ad)
3 Reasons the Capital One-Discover merger is a big deal
How major US stock indexes fared Wednesday, 2/21/2024

3 Midcap Building Industry Stocks Constructing Good Price Action

3 Midcap Building Industry Stocks Constructing Good Price ActionAs midcap stocks as an asset class are on the rise, Installed Building Products NYSE: IBP, SiteOne Landscape Supply NYSE: SITE and Masonite International NYSE: DOOR are price leaders. 

Academic research has shown that smaller stocks tend to outperform larger peers over time. While there’s been debate recently if the small-cap premium still exists, it’s clear that midcaps, stocks with a market capitalization between $2 and $10 billion, are shining.

The SPDR S&P Midcap 400 ETF NYSEARCA: MDY has topped the performance of the SPDR S&P 500 ETF NYSEARCA: SPY.

Year-to-date total return: 

MDY: 18.32%

SPY: 11.97%

One-year total return: 

MDY: 82.88%

SPY: 51.91%

Given that outperformance, why don’t we hear more about midcap stocks? Mostly because they’re not the behemoth market movers that constitute the top components of the S&P 500.


Midcaps are more nimble than large caps, meaning managers can pivot faster to pursue a project or abandon it. They can also raise funds more easily than smaller companies, and have more attention from Wall Street analysts, which attracts investment. 

Here’s a look at three midcap stocks whose stocks rallied Friday. All hail from some area of the red-hot home building and remodeling industries. 

Installed Building Products, with a market cap of $3.9 billion, bolted $4.79 Friday in heavier-than-average volume, closing at $131.68.

The stock was up 8.58% for the week, and it cleared a buy point of $131.11 of a consolidation that began in February. 

Installed Building Products is an installation contractor for garage doors, rain gutters, insulation, shower doors, fireplaces and other items. Like many other building industry companies, it’s been growing during the housing boom. 

On April 15, it announced the acquisition of Alert Insulation, a California company that installs insulation, acoustical ceiling systems and fireproofing services in commercial buildings. provider of fiberglass insulation installation, fireproofing services and acoustical ceiling system installation to commercial customers. 

Earnings grew at double-digit rates in the past eight quarters. Net income met or beat analysts’ estimates in the past nine quarters. The stock has a robust return on equity, 45%, showing good deployment of investment capital. 

The stock is potentially in a buy zone, having cleared its pivot point by less than a dollar on Friday.
3 Midcap Building Industry Stocks Constructing Good Price Action

SiteOne Landscape Supply is another midcap stock trading at new highs. It advanced $5.24 or 2.96% to $182.32. It rallied to a high of $184.37 on April 12, then pulled back to find support at its 10-day moving average. Watch for it to clear resistance above that prior high.

The company has a market cap of $8 billion. It operates 150 retail locations selling equipment and tools for irrigation, nurseries and gardens, grass seeds, outdoor lighting and other exterior and landscaping needs. 

Here again, is a company showing strength during the boom in home improvement and homebuilding. Shares advanced 14.93% year-to-date and 155.82% over the past year. 

Sales and earnings growth accelerated in the past two quarters. However, when the company reports its first-quarter at the end of May, analysts expect a loss of $0.44 per share on $538.11 million. That would be an improvement on the revenue side. 

Mutual fund ownership grew in the most recent quarter, after a dip in the prior quarter. That’s a good sign, as growing institutional ownership is what sends a stock’s price higher. 
3 Midcap Building Industry Stocks Constructing Good Price Action

Masonite International, with a market cap of $3.19 billion, gapped up $5.02 Friday, closing at $130.70, a gain of 3.99%. Volume was 72% above average. 

The company makes and sells interior and exterior doors and related products, such as molding, used in construction and remodeling. Although it sells into numerous channels, such as European construction, corporate and architectural, the bulk of its revenue comes from the North American residential market, which has been booming. 

The stock has been in rally mode since breaking out of a cup-with-handle base in December. Year-to-date, the stock is up 32.91%, and the one-year return is 196.04%.

Earnings grew at double- or triple-digit rates in the past four quarters. 

The stock is extended beyond any reasonable buy point. In addition, it’s due to report quarterly earnings on May 4. Investors would be best served to watch the stock’s chart action, and watch how its chart patterns play out following the report. A moving average pullback or even a new area of consolidation could offer a new entry point.

3 Midcap Building Industry Stocks Constructing Good Price Action

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Should you invest $1,000 in Installed Building Products right now?

Before you consider Installed Building Products, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Installed Building Products wasn't on the list.

While Installed Building Products currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Installed Building Products (IBP)
4.2991 of 5 stars
$202.43-1.7%0.65%23.16Moderate Buy$173.33
SiteOne Landscape Supply (SITE)
1.03 of 5 stars
$163.13-0.5%N/A43.16Hold$172.88
Masonite International (DOOR)
2.4222 of 5 stars
$129.83+0.0%N/A18.26Hold$111.78
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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