In the first few weeks of 2025, mid-cap stocks have been delivering impressive gains, with H&E Equipment Services, Inc. (NASDAQ:HEES) leading the pack with an astonishing 82.29% year-to-date performance.
In the first few weeks of 2025, many mid-cap stocks have been delivering impressive gains, and it’s worth taking a closer look at these often-overlooked companies. One stock that has caught our attention is H&E Equipment Services, Inc. (NASDAQ:HEES), which has seen an astonishing 82.29% year-to-date performance.
The Case for Mid-Cap Stocks
Historically, mid-cap stocks have outperformed both large and small caps in 55% of rolling five-year periods since 1983. This is because they offer a unique sweet spot between stability and growth potential. With the S&P MidCap 400 index outpacing the S&P 500 year-to-date, it’s clear that mid-caps are worth exploring.
H&E Equipment Services, Inc.: A Leader in Heavy Machinery Rentals
H&E Equipment Services, Inc. is a leading provider of heavy machinery rentals for construction and industrial use. They also sell and service this equipment, but rentals remain their primary source of revenue. The company’s recent surge can be attributed to the announcement by United Rentals that they would be acquiring H&E for $4.8 billion on January 14.
A Promising Acquisition
While H&E’s financials have taken a hit in recent quarters, with total revenues down 4% and net income dropping to $31.1 million from $48.9 million last year, the acquisition by United Rentals is expected to drive growth and increase shareholder value. The current market capitalization of $3.26 billion still offers room for upside if this deal materializes.
Why HEES Ranks Among the Hottest Mid-Cap Stocks
With its impressive performance and potential for further growth, H&E Equipment Services, Inc. ranks 1st on our list of the hottest mid-cap stocks so far in 2025. While we acknowledge the potential of HEES as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns within a shorter time frame.
Investors Take Note
If you’re looking for an AI stock with similar potential to HEES but trading at less than 5 times its earnings, be sure to check out our report on the cheapest AI stock.
