Four Undervalued Mid Caps to Own Now (& Why): Q, THC, ONNN, NYB

Call it middle child syndrome, but the mid caps stocks have been doing the bulk of the market's bullish work this year, yet have gotten the least vocalized love from investors...though somebody clearly buying them. Since it's a trend that's apt to continue, it may be wise to cherry pick a couple of extra names from the group to overweight your mid cap exposure. I'd start by considering New York Community Bancorp, Inc. (NYSE:NYB), ON Semiconductor Corp. (NASDAQ:ONNN), Tenet Healthcare Corporation (NYSE:THC), and Qwest Communications International Inc. (NYSE:Q). Here's a closer look at each one.

Tenet Healthcare Corporation (NYSE:THC)

Predictable? Yeah, I know. That's ok though - the recovery the company is making is for real, whether it's been talked about too much or not. Analyst upgrades are starting to flow in as well, and we now know that hospitals like Tenet Healthcare Corporation aren't subject to payment cuts that are part of the discussion (and new bill) the Senate is batting around now. Tenet Healthcare can go right on betting EPS estimates, as it has for the last four quarters. (When will analysts figure it out?)

Chart-wise, THC has been getting hammered since October. Though it's fun to see rallies, in Tenet's case, I'm glad the chart got reigned in after a 500% run since March. The dip is a buying opportunity, and not a reflection of the THC's value. That said, I suggest waiting to buy Tenet Healthcare on the way up rather than on the way down. Timing is everything.



Qwest Communications International Inc. (NYSE:Q)

Telecom's been a disaster for so long, I was wondering if steady-Eddie investors would ever find them again. They did. Now that the group's got some wind in its sails, we can hitch a ride.

I like Qwest Communications shares for two reasons. The first one is the chart - Q broke out of a long-standing wedge in early November... a time when the rest of the market was struggling. The second reason is value. I know a telco provider isn't the sexiest of stock picks, but Qwest - like Tenet - has beat earnings estimates its last four quarters. That makes me wonder of the projected P/E is hyper-inflated. Actually, I think it is hyper-inflated... Q is worth more than the market's saying it is.