7 High-Quality Mid-Caps You Need To Monitor Closely In 2025
It's often said that true wealth is build from holding small and mid-caps for a long period. Here are 7 that, sooner or later, you could hold forever.
Welcome back, Fluenteers!
We’ve previously discussed small-caps, and I've received numerous messages to cover mid-caps; that’s on today’s agenda. Small-caps often have wider and deeper economic moats compared to large-caps, offering more predictability and safety to quality investors like yourself and me. Today, we’re covering 7 small-caps with a robust economic moat, predictable revenues, a strong secular trend, and competent management at the helm of the company.
Here are the 7 small-caps that are worth a spot on your watchlist.
Happy compounding!
7. Sezzle Inc. (Ticker: SEZL)
Buy Now, Pay Smarter. Sezzle is rewriting the rules of credit.
Sezzle isn’t just another BNPL app.
It’s a mission-driven fintech with a clear focus:
Empower younger, underserved consumers with smarter, interest-free payment options.
While giants chase global scale, Sezzle sticks to what it does best:
Transparent installment plans
Strong merchant partnerships
Financial tools that build—not trap—consumer credit
This isn’t about debt. It’s about control, education, and trust.
A customer-first model with a purpose.
Sezzle built its platform on a foundation of ethical finance:
Zero-interest, pay-in-4 plans
No hidden fees or revolving debt
Credit-building features via partnerships (like Sezzle Up)
Emphasis on financial literacy and responsible spending
Its typical user isn’t maxing out cards—they’re managing tight budgets with discipline.
And that trust translates into loyalty, engagement, and repeat usage.
Small footprint. Sharp execution.
Unlike bloated competitors, Sezzle:
Stays lean with disciplined spending
Targets North America with localized precision
Keeps its underwriting tight and its fraud losses low
Avoids chasing unsustainable growth at all costs
This isn’t a blitzkrieg strategy. It’s a sustainable one.
Merchant-focused. Margin-aware.
Sezzle isn’t just loved by users. It’s a valuable tool for merchants:
Drives conversion and average order value
Integrates seamlessly into e-commerce stacks
Offers customer insights, real-time analytics, and repeat shopper data
It monetizes through merchant fees, not user exploitation.
As volume scales, margins also follow.
Turning the corner. Quietly.
After years of building the rails, Sezzle is shifting gears:
Achieved positive EBITDA and near break-even net income
Reduced costs and improved underwriting discipline
Expanded high-value partnerships (e.g., Target, GameStop)
Gaining wallet share in a saturated but stabilizing BNPL market
In an industry littered with flameouts, Sezzle is still standing—and turning profitable.
Optionality through simplicity.
Sezzle may look niche, but there’s leverage inside:
Credit reporting integrations → build long-term trust loops
Sezzle Premium → subscription revenue for power users
B2B tools → fraud management, customer analytics, financing solutions
International opportunities, selectively and sustainably
Every added layer reinforces the core value prop: smarter payments.
In a crowded space, Sezzle stands apart.
Not because it’s the biggest.
But because it’s:
Focused
Ethical
Capital-light
User-loved
Merchant-aligned
While competitors burn through cash and credibility, Sezzle quietly compounds both.
It’s not just buy now, pay later. It’s trust now, grow forever.
Sezzle isn’t for every investor.
But if you believe fintech can be lean, local, and principled, this just might be one to watch.
6. IES Holdings, Inc. (Ticker: IESC)
Power, connectivity, and the backbone of American industry. IES Holdings builds it all.
IES Holdings doesn’t build skyscrapers.
It builds what makes them work.
Electric systems. Communications infrastructure. Industrial automation.
IES is a quiet leader in essential, technical contracting and services across the U.S.
From data centers to schools, factories to solar farms—when things need to work, IES makes sure they do.
Four segments. One integrated engine.
IES operates through four distinct, cash-generating segments:
Communications – designs and installs structured cabling, data networks, and tech infrastructure
Residential – wiring and electrical services for homebuilders in high-growth regions
Commercial & Industrial – electrical contracting for large-scale facilities, including energy and manufacturing
Infrastructure Solutions – custom-engineered solutions for switchgear, control panels, and automation
Each segment serves a different market. Together, they create a diversified, recession-resilient revenue base.
Not a cyclical contractor. A long-term compounder.
While others chase project volume, IES plays the long game:
Focuses on recurring or essential services, not just one-off builds
Targets higher-margin technical niches, not commodity labor
Emphasizes decentralized leadership—each business runs like its own focused company
Operates with low corporate overhead, enabling reinvestment where it matters
Margins aren’t sky-high, but they’re consistent.
And the capital allocation? Quietly excellent.
Founder DNA. Owner mindset.
Chairman Jeff Gendell, through his fund, holds a significant stake in the business.
That ownership mentality trickles down:
Conservative use of leverage
Acquisitions focused on fit and returns, not hype
A deep bias toward cash flow over optics
It’s not the kind of company that hits earnings beats—it’s the kind that keeps showing up, year after year.
Tailwinds in every direction.
IES doesn’t need a boom to grow. It just needs the world to keep functioning—and modernizing:
Data infrastructure demand keeps rising with cloud and AI
Residential buildouts remain strong in the U.S. Sunbelt
Energy transition drives upgrades in industrial power systems
Automation and reshoring boost demand for control systems and custom fabrication
And IES is positioned right where those dollars are going.
Growth through execution, not excitement.
IES doesn’t issue bold forecasts or flash headlines.
Instead, it quietly delivers:
Mid-to-high single-digit organic growth
Healthy free cash flow conversion
A growing base of recurring and service-driven revenue
Smart tuck-in acquisitions that enhance—not dilute—the model
The result? A company that grows without chasing growth.
Underfollowed. Understated. Underappreciated.
IES Holdings won’t show up in your favorite tech ETF.
But it touches nearly everything that enables the modern economy—from broadband to electricity to industrial control.
In a world of hype cycles and fragile narratives, IES offers something rare:
Execution. Essentials. And endurance.
And that might be the most powerful compounder of all.
5. Tecnoglass Inc. (Ticker: TGLS)
Not just windows. Not just glass. Tecnoglass builds the skin of modern cities.
Tecnoglass Inc. operates in a space most investors overlook—
Architectural glass, aluminum, and window systems for commercial and residential buildings across the Americas.
But this isn’t commodity glass. This is:
Hurricane-resistant, energy-efficient facade tech
Built to meet strict U.S. building codes
Engineered from start to finish in a single, vertically integrated process
Once installed, it’s there for decades. Replacing it isn’t a decision—it’s a rebuild.
Built for the real economy. And built to last.
Demand for Tecnoglass isn’t optional—it's structural:
Urban migration is reshaping U.S. cities
Energy regulations are tightening, especially in the Sunbelt
Developers want performance, reliability, and code compliance
Tecnoglass delivers it all—faster and cheaper than competitors.
How? With Latin American cost efficiency and U.S. distribution muscle.
Vertical integration that feels like software.
Unlike fragmented peers, Tecnoglass does it all in-house:
Glass processing
Aluminum extrusion
Final assembly
Direct-to-developer logistics
The result?
Shorter lead times
Higher margins
Total quality control
Custom solutions at scale
This is manufacturing as a service, with long-term lock-in.
A U.S.-focused export story—with a moat.
Over 90% of revenue comes from the United States, especially Florida, Texas, and Georgia.
Key advantages:
Proximity: Colombia is closer to Miami than many U.S. factories
Speed: Faster delivery cycles due to direct shipping and strong logistics
Scale: Tecnoglass owns its distribution centers in the U.S.
It’s quietly become the go-to partner for mid- to high-rise development in key U.S. regions.
Led by founders. Run like owners.
Tecnoglass isn’t chasing trends—it’s building value, brick by brick:
Founder-led with deep operational roots
High insider ownership
Capital allocation focused on dividends, buybacks, and growth capex
No fluff, no flash—just compounding returns
ROIC stays healthy. Debt is under control. Execution is consistent.
Margins like software. Materials like steel.
Tecnoglass looks like a factory stock, but performs like a compounder:
Gross margins ~40%
Operating margins in the high 20s
Recurring demand from replacement cycles and urban development
Optionality through new product launches and regional expansion
In a commodity world, it has built an identity and pricing power.
Not cyclical. Structural.
Tecnoglass isn’t just cycling, it’s anchoring itself to:
Climate-driven infrastructure mandates
Aging building stock needing upgrades
Developers seeking trusted, integrated partners
It’s not just a supplier. It’s the quiet foundation behind skylines.
This isn’t hype. This is execution.
Tecnoglass won’t be the stock you brag about at parties.
But in five years, it might be the one you’re glad you never sold.
4. Mycronic AB (Ticker: MYCR)
Precision behind the screens. Mycronic enables the invisible.
Mycronic AB isn’t a consumer tech name.
But its technology sits at the heart of the devices you use every day.
From smartphones to EV displays, Mycronic powers the machines that build the displays, with:
Laser-based mask writers for semiconductors and photomasks
High-speed pick-and-place machines for circuit boards
Jet printers and automation tools for electronics assembly
This is niche manufacturing tech. Critical, complex, and deeply embedded in global supply chains.
Not mass market. Mission-critical.
Mycronic dominates in corners others can’t reach:
One of the only global players in high-end mask writers
Supplies Tier-1 foundries and display makers in Asia, Europe, and the U.S.
Long product cycles, long relationships, long lead times
Clients don’t switch often.
Precision tools worth millions don’t get replaced on a whim.
This isn’t transactional—it’s entrenched.
Steady demand. Deep moats.
Mycronic serves markets where:
Display technology keeps evolving (OLED, MicroLED, foldables)
Semiconductor complexity is rising
Miniaturization and custom PCB design are accelerating
And it offers exactly what OEMs need:
Ultra-precise systems
Long lifespan and upgradeable platforms
Integrated service and support
Margins stay strong because switching costs are high, and trust is even higher.
Multi-niche. Multi-engine. Margin-rich.
Mycronic isn’t a one-product story. It’s a portfolio of high-margin segments:
Pattern Generators – industry-leading tech for advanced photomask production
Assembly Solutions – jet printers, mounters, and dispensers for PCB manufacturing
Global Services – recurring revenue through maintenance, upgrades, and training
Together they create:
Healthy gross margins (~45–50%)
Strong operating leverage
Global revenue mix with expanding service lines
This is a company that scales without chasing scale.
Swedish engineering with global reach.
Headquartered in Täby—but with feet on the ground in key tech hubs:
Strong presence in East Asia (Taiwan, South Korea, China)
Installed base across the U.S. and EU
Responsive R&D that evolves with customer roadmaps
It's small enough to focus, but global enough to matter.
Resilient. Disciplined. Ready.
Mycronic doesn’t swing for the fences. It is engineered for reliability:
Net cash balance sheet
Disciplined capital allocation
Steady R&D investment to stay ahead of the tech curve
Strong backlog visibility due to long order cycles
When the industry breathes in, Mycronic stays calm. When it breathes out, Mycronic compounds.
Quietly indispensable.
You won’t see the Mycronic logo on your next device.
However, its technology likely played a role in its creation.
That’s the kind of company worth paying attention to:
Complex, critical, and quietly compounding at the edge of visibility.
3. Fortnox AB (Ticker: FNOX)
Sweden’s quiet digital backbone. Fortnox powers the small business engine.
Fortnox isn’t trying to be everything to everyone.
It’s focused on one thing—giving Swedish small businesses the digital tools to thrive.
And it’s winning.
Cloud-based accounting, invoicing, payroll, and CRM
Tailored for the local tax code, business culture, and regulatory environment
Built for small companies, sole proprietors, and entrepreneurs
This isn’t a global SaaS blitz.
It’s embedded infrastructure—woven into the fabric of everyday business.
Niche. Local. Unstoppable.
Fortnox thrives in a space where global giants often fail:
Highly regulated local workflows
Frequent tax and labor law changes
A fragmented customer base of non-technical users
And it turns these complexities into a competitive edge:
Plug-and-play simplicity
Industry-leading customer support
Constant product updates tuned to Sweden’s evolving needs
When your software just works for the local ecosystem, customers don’t leave.
They tell their friends.
Land-and-expand in its purest form.
The core strategy is simple—and beautifully efficient:
Win the customer with accounting
Layer on payroll, e-signing, CRM, time tracking, and more
Charge per module, per employee, per month
The longer you stay, the more you pay willingly.
Average revenue per customer keeps climbing.
Churn stays microscopic.
A platform, not a product.
Fortnox isn’t a tool. It’s becoming a business operating system:
Open APIs enable third-party integrations
A marketplace of partner apps adds long-tail functionality
Bank integrations, tax authorities, and accounting firms all plug in
The more nodes that connect, the harder it becomes to leave.
Every small business function is centralized in one clean interface.
Profit machine disguised as helpful software.
Under the hood, Fortnox is a financial outlier:
Gross margins above 80%
Operating margins hovering around 40%
Minimal sales costs thanks to strong word-of-mouth
Recurring revenue above 95%
It grows rapidly, reinvests wisely, and continues to generate cash.
A rare trifecta in European SaaS.
Optionality without distraction.
The core is Sweden, but Fortnox has levers:
Deepening wallet share with existing users
New verticals within the SME space
Potential regional expansion over the long term
More tools developed in-house or acquired surgically
No chasing scale for scale’s sake.
Every move ties back to simplicity and user experience.
Run by product-first thinkers.
The company’s culture is built around:
Continuous iteration
Customer feedback loops
Relentless focus on user ease
Leadership isn’t flashy, but they execute.
And they’ve proven they can scale without losing the simplicity that made them great.
Not loud. Not global. Not replaceable.
Fortnox doesn’t need to conquer the world.
It just needs to keep showing up, every day, for Sweden’s 1.3 million small businesses.
And it does—quietly, profitably, and with a product they can’t imagine working without.
2. Netwealth Group Limited (Ticker: NWL)
The quiet revolution in Australian wealth. Netwealth is building the pipes.
Netwealth Group isn’t a flashy fintech chasing trends.
It’s a technology-led platform reshaping how Australians manage and grow their wealth.
Think of it as the infrastructure layer for:
Financial advisers
High-net-worth individuals
SMSFs (Self-Managed Super Funds)
Family offices
It doesn’t compete with advisers—it empowers them.
And it continues to win market share year after year.
Built for the future of advice.
The financial advice industry in Australia is evolving:
Regulatory burdens are rising
Legacy platforms are clunky, expensive, and hard to integrate
Advisers need efficient tools, fast onboarding, and seamless client reporting
Netwealth meets that need with:
A clean, intuitive platform
Deep functionality: investments, tax, reporting, compliance
Strong third-party integration and APIs
Mobile-friendly, adviser-branded client portals
This is not a bank product retrofitted for wealth—it's wealth tech built from the ground up.
Modern wealth infrastructure with a 10-year head start.
Netwealth has spent over a decade refining its platform while competitors stood still:
Daily transaction visibility
Fast onboarding and account setup
Multi-asset, multi-model portfolios in one dashboard
Institutional-grade features for retail advisers
And it continues to add value—layer by layer, module by module.
The result? Advisers bring their clients. Clients bring their assets.
The flywheel turns.
Strong growth. Strong retention. High margin.
This isn’t just a better user experience—it’s a better business model:
Funds Under Administration (FUA) compound at double-digit rates
Net inflows consistently outperform peers
Operating margins above 40%
Low capital intensity, high recurring revenue
Add in platform fees, admin fees, and product margins—Netwealth captures value without overcharging.
Founder-led with skin in the game.
The Heine family continues to run the company and owns a significant stake.
That means:
Conservative balance sheet
Long-term thinking over quarterly optics
Reinvestment in tech, not marketing fluff
Relentless focus on adviser satisfaction
Culture matters—and Netwealth’s culture is one of trust, product obsession, and quiet dominance.
Optionality inside the engine.
Netwealth isn’t standing still. It has levers:
Product innovation (alternative assets, ESG, private markets)
Expanding into adjacent services (insurance, estate planning)
Potential geographic expansion or white-label offerings
Deepening adviser penetration across Australia
Every new feature increases platform stickiness.
Every adviser who joins rarely leaves.
1. Medpace (Ticker: MEDP)
Clinical trials don’t run themselves. Medpace runs them better.
Medpace isn’t a biotech.
It doesn’t chase the next blockbuster drug or headline breakthrough.
Instead, it sits in the picks-and-shovels layer of modern medicine:
A full-service clinical contract research organization (CRO).
Its role?
Design, manage, and execute clinical trials for drug and device companies
Navigate regulatory hurdles with precision
Accelerate time-to-market for life-saving therapies
It’s behind the scenes, but essential to the entire drug development chain.
A single, integrated model in a fragmented industry.
Most CROs piece together acquisitions.
Medpace is built differently:
One global platform
Centralized systems and processes
Employees trained and retained in-house
No outsourcing to third parties
This means:
Cleaner data
Tighter timelines
Higher quality control
Greater client trust
In an industry where precision is non-negotiable, consistency is a competitive edge.
Founder-led. Discipline-first.
Founder CEO Dr. August Troendle still runs the show and owns a large chunk of the business.
He’s not interested in empire-building. He’s interested in excellence.
What that looks like:
Little to no M&A
Consistent margin discipline
Reluctance to chase revenue at the expense of execution
Surgical hiring to protect culture and control
This is rare in CRO land—and it shows up in the numbers.
Financials that compound quietly.
Medpace doesn’t burn cash. It mints it.
Operating margins ~25–30%
High return on capital with minimal debt
Steady revenue growth, fueled by long-term client relationships
Highly visible revenue stream tied to multi-year trial phases
Clients don’t switch mid-trial. And when Medpace executes well, they rarely switch at all.
Tailwinds from every direction.
The market for outsourced clinical research keeps expanding:
Biotech funding remains robust
Trials are getting more complex—and more global
Regulators are tightening standards, requiring expert navigation
Pharma prefers CROs that can manage everything under one roof
Medpace doesn’t need explosive growth to win.
It just needs the industry to keep trending toward complexity, and it is.
Operational leverage. Optionality ahead.
Every new trial adds scale to Medpace’s already efficient base.
But there’s more under the surface:
Deepening capabilities in oncology, rare diseases, and cell therapies
Geographic expansion into underpenetrated markets
Potential to broaden lab and imaging services to capture more value
No need to overreach—just keep tightening the flywheel.
Not the loudest in the room. But one of the best run.
Medpace won’t show up on your biotech watchlist.
It doesn’t sell drugs—it sells trust, speed, and clinical clarity.
It compounds because it delivers.
It retains clients because it doesn’t overpromise.
And in a world full of moving pieces, that kind of focus is hard to replace.
This isn’t a biotech bet. It’s a cash-generating engine behind them.
Medpace doesn’t need hype. It just needs another trial.
And they keep coming.
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Fortnox is being acquired.
”Biotech funding remains robust”… Are you sure lol 😀 Book to bill under 1 at the moment