2 Mid-Cap Basic Materials Stocks with Large-Cap Potential

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The S&P Midcap 400 index has gained 41.2% over the past year, outperforming the 34.2% returns delivered by the benchmark S&P 500 index, which represents large-cap stocks. Given the impressive start to the third-quarter earnings season and the consequent market rally, several mid-cap stocks could become large caps in the near term.

We think fundamentally sound mid-cap basic materials stocks Reliance Steel & Aluminum Co. (RS) and Ternium S.A. (TX), which currently possess market capitalizations of more than $8 billion, have the potential to become large-cap stocks soon. So, it could be wise to bet on them now.

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