After Doubling the S&P 500, This Top Mid-Cap Is Still a Buy By Lucas Downey, Contributing Editor, TradeSmith Daily With holiday season just around the corner, what better way to celebrate than unwrapping a real outlier company? This is a top name that should be on your radar in 2025. Just as it was in 2024. Only a handful of weeks ago, we reminded you to always remember to buy mid-caps in November. The evidence then suggested a big rip was on the way. It didn’t disappoint. The S&P MidCap 400 is up 10% from the start of the month! Certain stocks are up double, triple, and more over the same period. Circling back to October 2023, I named Deckers Outdoor (DECK) as a top choice for the new bull market. After more than doubling the S&P 500 since, I’m going to give you three evidence-rich reasons to keep riding this mid-cap stalwart into 2025. Three Reasons Deckers Is a Top Growth Stock to Own One characteristic that all great investments share is strong performance. Nobody will call a stock great until it rewards its shareholders with market-beating returns. If you’re not familiar with Deckers Outdoor, it’s one of the hottest shoemakers around. One of its bestselling shoes is the cushy HOKA brand. After acquiring HOKA in 2012 for a reported $2 million over several years, it kick-started one of the most iconic shifts in shoe tastes. To this day, other brands have brought competition to this space… but HOKA remains the champ. The HOKA acquisition may be what lit a fire under Deckers Outdoor. But we can look to the data to confirm what investors love about this stock. Reason #1 to own DECK is consistent new highs. Few companies have the kind of momentum that results in consistent new highs. And DECK shares have pressed higher and higher, with the stock up a staggering 1,127% over the past 10 years. This kind of strong momentum is what we call a Power Factor – you want stocks that go up, especially ones continually charting new highs. The beauty is this trend continues to this day. Below reveals how DECK has more than doubled the S&P 500 this year with a 74% climb:
Combing through the new-high list is like casting a net for potential big winning names. The next step is to do some homework on the company and understand the growth trends. When you seek only the companies with double-digit revenue and net income growth, you’ll be closer to isolating elite businesses. Reason #2 to own DECK comes down to outstanding sales and earnings growth. If you want to find tomorrow’s winning names, focus on earnings superstars. Very few companies on the planet continuously do more and more business each year and return bigger and bigger profits along the way. But it’s more than worth it when you zero in on a special situation. Here we can see that Deckers exudes that profile. If the shoe fits, wear it… and invest in the stock! From fiscal year (FY) 2021, Deckers’ revenue grew from $2.55 billion and is estimated to reach $5.43 billion in FY 2026. Even more impressive is the net income growth over the same period. FY 2021 net income stood at $380 million and is estimated to surge to $950 million in FY 2026. And get this: In its latest Q2 earnings report, the HOKA brand represented just over 43% of overall sales, clocking in at $570.9 million. That’s a 34.7% increase from the year prior. Growth rates like these are another one of those Power Factors. It’s why the stock continues to run over the market seemingly year after year. The stairway to investing heaven is best climbed with a pair of HOKA shoes!
After you’ve done your homework and spotted a solid business in a powerful uptrend, all that’s left to do is find the perfect time to enter a trade. Here’s where TradeSmith can help. Reason #3 to keep riding the Deckers wave comes down to the rock-solid Quantum Score. I spent years on Wall Street trading desks handling equities orders for some of the biggest shops on the planet. When an institution decides to buy a company, odds are they did a lot of work ahead of time. Having institutional sponsorship is one of the best ways to validate an investment thesis. This level of institutional interest is the third Power Factor we need to see in great stocks. And at TradeSmith we have a one-click way to instantly size up a company’s three Power Factors all at once. When a company scores above 70 and both the fundamental and technical ranks are in the green zone, that’s the go signal. Here we see that Deckers resides well into the green area with a 77.6 score, indicating this is a top-quality company. Few stocks can say that:
This ranking process is how we find outlier companies early in their business cycle, allowing for huge upside potential. If you’d like to hear me dive a bit deeper into Deckers and competitor On, check out this recent video. You’ll learn the process we use in our market-beating Quantum Edge Pro service. It’s jam-packed with under-the-radar mid-caps loved by Big Money investors. And as a bonus, all Quantum Edge Pro subscribers can instantly score any stock and find out if it’s in the buy zone. We’re in one of the most powerful bull markets in recent memory. Mid-caps are running. Get your portfolio on deck. Regards, Lucas Downey
Contributing Editor, TradeSmith Daily | 