Fiera Apex, an asset manager, emphasizes the importance of identifying high-quality small and mid-cap companies with strong management teams and sustainable competitive advantages for investors. According to their latest report, the healthcare and technology sectors offer attractive growth potential with manageable risks.
In the healthcare sector, small and mid-cap companies hold significant long-term growth potential driven by innovation, demographic trends, strong demand, and solid fundamentals. Within the biotechnology subsector, companies focused on addressing unmet medical needs with de-risked clinical assets have substantial upside potential in the market. With prescription drug spending in the U.S. surpassing $400 billion annually and limited therapies available, there are vast untapped markets waiting for solutions.
On the other hand, the tech sector presents opportunities in cloud computing, artificial intelligence, and digital transformation. Small and mid-cap firms moving nearly $5 trillion are focusing on AI companies that control and process complex data, offering solutions to boost innovation and productivity in various industries. As cloud computing becomes the dominant form of computing, there is a growing opportunity for companies to adopt modern platforms with advanced functionality and data integration.
Fiera Apex experts suggest that investors consider companies that can replace legacy solutions with innovative platforms, especially in industries like construction and public administration that are in the early stages of modernization. Overall, identifying small and mid-cap companies with strong growth potential and innovative strategies is essential for investors looking for sustainable returns.
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