It's the basic question when investing in a stock: Is it on the way up or down?
To answer this question, the Street has developed numerous ways of attempting to predict what will happen, estimating various attributes tied to stock performance in order to determine what the future holds for a company's valuation.
After dissecting companies’ business prospects, Wall Street analysts come up with price targets of where they think a stock is headed. With estimates from Thomson Reuters, CNBC’s analytics team sifted through these metrics and came up with a list of 20 companies trading below their mean-price targets. In order to make it to the list, the stock performance must exceed the 15 percent return of the broader index since Sept. 30. The “potential to pop” is calculated based upon closing prices and analyst estimates as of Nov. 4, 2011.
The universe of companies used was the S&P 400 index, which measures mid-sized companies with a market capitalization value ranging from $1 billion to $4.4 billion. These companies represent 7 percent of the U.S. equity market, and their risk/reward profiles vary from both large and small-cap companies.
So, which mid-cap stocks do Wall Street analysts predict have the biggest potential to pop from current stock prices? Click ahead to find out!
By Giovanny Moreano and Paul Toscano
Posted 4 November 2011
Note: Mid-cap stocks listed on the index are chosen by Standards and Poor’s based upon several criteria, including financial viability, public float, liquidity, and other factors outlined here.
Disclaimer: Lists such as this are a starting point for investing ideas and are not recommendations made by CNBC.