Buy Hold Sell: 5 global SMIDs that could be tomorrow's giants

Whilst Aussie small caps have been on fire and are outperforming their large-cap peers year to date, it’s not the same story everywhere. In the US, for example, small and mid-caps (SMIDs) are still lagging – such is the dominance of the Magnificent 7. But when everything else is rallying, it can pay to fish where others aren’t.

And here’s the kicker: unlike Australia, where there’s a tiny pool of SMIDs – roughly 250 names that meet the $300 million to $10 billion market-cap cut-off – there are around 8,000 globally. That’s a lot of fish.

But with more choice comes the need to know where to look and how to separate the bluefin from the carp – because not every SMID is worth catching.

With that in mind, Livewire’s Chris Conway is joined by Michael Poulsen from Canopy Investors and Nick Markiewicz from Ellerston Capital to unpack the factors they look for when hunting global SMIDs, run the ruler over a handful of names, and each share one stock they think has a bright future ahead.

Please note that this episode was filmed 19 November 2025

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Edited Transcript

Chris Conway: Hello and welcome to Livewire's Buy Hold Sell, my name is Chris Conway. Whilst Aussie small caps have outperformed their larger peers year to date, it's not the same story everywhere. In the US, for example, smalls are still lagging behind large-cap names, but as always, it matters where you look, especially when there's so much more opportunity on the global scale. To better understand what to look for and run the ruler over a couple of hot stocks, I'm joined by Michael Poulsen from Canopy Investors and Nick Markiewicz from Ellerston Capital. Gents, before we get to the stocks, I did just want to ask, when you're looking through your universe of names, what factors are you paying most attention to? Nick, I'll come to you first.

Key factors for Global small and mid-caps

Nick Markiewicz: I think at a fundamental level we're looking for most of the normal things that investors look for. That's sustainable earnings growth, good margins, a nice market structure that a company operates in, good balance sheet, reasonable valuation, all those sorts of things. I think most importantly for us, we look for reasons why to own a stock, what is changing with the business? Do we have a better view on earnings growth near term? Do we have a better view on earnings growth long term? Is there a catalyst, an inflexion point, something like that? So we spend an enormous amount of time trying to identify companies from a fundamental standpoint, but also time our entry into those as well.

Chris Conway: Michael, what about you? What factors are you looking at?

Michael Poulsen: So for us, it's business quality. We're looking to invest in companies that have sustainable competitive advantages that are operating in industries that are healthy and growing, that are led by managers that are capable and aligned with shareholders' interests, with positive ESG as well. Our experience is that high quality companies tend to surprise you by how good they are, and low quality companies tend to surprise you by how bad they are.

Chris Conway: Now that we understand how the gents look at the world, we're going to run the ruler over three global small and mid caps. First up is PTC Incorporated. It's a software company that helps manufacturers design, manage, and optimise products through its various platforms. Michael, buy, hold, or sell for you?

PTC Inc (NASDAQ: PTC)

Michael Poulsen (BUY): It's a buy for us and we hold it in the fund, Chris. So PTC is a US listed software company. As you mentioned, it helps companies design and manufacture complex products. So think of it as software that an engineer might use to come up with 2D and 3D plans and then subsequently to manage that process. So this is software that would be widely used in heavy manufacturing industries, so think aerospace and defence and so on. It's benefiting from automation of manufacturing, reshoring of manufacturing, and also increased investment in aerospace and defence.

We like the company. Its share price has actually been quite weak over the course of the last couple of months. I think that's for a couple of reasons. Firstly, there are investors that worry that AI is going to disrupt all software companies. I think there's also an aspect of people being a bit disappointed that the company's guidance for next year wasn't a little bit more positive. Our view on that, we don't think that AI is likely to disrupt the company in the near term. We think that the guidance for next year may be conservative. And in any case, we think that that is now more than adequately reflected in the valuation at the current price.

Chris Conway: Michael, you touched on it there, sthe hare price has been a little bit soft, PTC down around 9% over the last 12 months and a bit of weakness in recent months. Nick, what about you? Any value there? Buy, hold, or sell?

Nick Markiewicz (HOLD): It's a hold from us. We actually used to own PTC until quite recently and we sold it after there was rumours of a takeover offer. That takeover offer didn't come to fruition, but the stock popped on it and we sold our position. We also sold it because we thought valuation got a little bit too stretched. Look, it's a really nice business. When you design software, you become embedded in very technical processes, very hard to displace, and you become the design language that has years of longevity in it.

Our sticking point at the moment is probably just the end markets. They've got a lot of industrial end markets that are struggling. US PMIs remain very weak. And I think that was probably embedded in their guide. As Michael mentioned, the guide maybe disappointed some and the only thing I'd add to that would be that the guidance was quite back-loaded. So I think you put all those things together, it's probably not a buy here, but look, we would be looking to own a business like that if we saw the industrial cycle turn or maybe if the valuation became a bit better for us.

Chris Conway: Next up we're going to talk Corpay. It's a global payments company that helps businesses manage corporate expense payments. Nick, I'll stay with you. Buy, hold, or sell?

Corpay (NYSE: CPAY)

Nick Markiewicz (BUY): Strong buy for me. So I think Corpay is a real hidden gem in this market. If you take a 25 year view of this business, this business has compounded earnings 20% over 25 years. It's one of only a few companies in the S&P 500 that's actually done that. I think when you run the numbers, only 2% of companies listed today have achieved that and Corpay is one. The next two years, I think, are going to be no different. I think they're going to do 20% EPS growth each of the next two years. The reason why we like it today and are very bullish today, one is that the business mix is changing and changing for the better. Their FX business, which used to be quite small, is actually growing. It's growing around 20% per annum organically, and they're layering acquisitions on top. FX and the accounts payable business should be around 40% of the group by next year, and that's a big change from when it was only 10 or 15% a few years ago.

That's important because the market thinks the rest of their business is ex-growth and structurally challenged, which I would disagree with as well, but I think the market will look at the growth of this business in a bit of a different light in the coming months, hopefully. The next reason I like it is just purely valuation. I mentioned the growth characteristics of this business. It's trading on 10 times earnings. So for those of you that look at a PEG ratio, it's on a half PEG, which is quite absurd. So, I like it for those reasons and I think it's got a big future ahead.

Chris Conway: So strong buy from you, Nick. The share price, it's struggled a bit over the last 12 months, down around 20%, but obviously you're seeing some value. Michael, what about you? Are you seeing that same value? Buy, hold, or sell?

Michael Poulsen (BUY): It's a buy for us as well. Yeah, we like the company. We followed it for a long time. We like the fact that the corporate payments business is driving an acceleration in the company. That's a good business. MasterCard recently announced that it's investing in Corpay's corporate payments business along with Corpay, which we think is validation of the strategy. As Nick mentioned, it's been exceptionally well led by its CEO Ron Clark for 25 years, and at 10, 11 times price to earnings multiple, it's too low.

Chris Conway: There you go, ladies and gentlemen, a strong double buy on Corpay. Next up, we're going to talk Moncler, the Italian luxury fashion brand famous for its high-end down jackets and outerwear. Popular with the skiing crowd, I've been told. I don't ski. Michael, I'll stay with you. Buy, hold, or sell for Moncler?

Moncler (BIT: MONC)

Michael Poulsen (BUY): This is a buy for us. So this is in the portfolio. So as you mentioned, Moncler is a luxury outerwear brand, so think of the ski jackets that you might see on the slopes. It's a true luxury brand, and in luxury you either have heritage or you don't have heritage. It has heritage. We like the fact that it has this niche focus on outerwear. A little bit like Corpay, it's been exceptionally well led by self-made, effectively founder billionaire who pulled it out of insolvency. Its financial results over the course of the last 25 years have been amazing. Recently, global luxury is in a downturn and Moncler is no different. We're happy to take a longer-term view, though. We think that ultimately, when demand returns, that it will be well positioned, so it's a buy for us.

Chris Conway: Nick, up 17% over the past year. Buy, hold, or sell for you?

Nick Markiewicz (HOLD): It's a hold for us. It's a really nice business, and as Michael said, it dominates a small niche, which is always a great starting point in luxury. Part of the issue we have with Moncler is that the niche that it dominates is quite small and typically luxury brands struggle to grow outside of their niche. They have to grow in ancillary categories, which is hard to do. And it doesn't have a leather goods business, which is how the rest of the luxury goods companies generate a lot of their profit. So that's one challenge.

I think they've got to push away from wholesale and towards a directly operated store model, and that's actually a good thing long term and it's what they need to do. But I think near term it probably raises the risk that there may be a hiccup or two in sales growth as they do that transition. Inventory is a little high, on the higher end, but they've managed that well in the past. And then finally, not saying anything new here, but half their sales come out of Asia, and Asia, particularly China, remains a very weak part of the market to date. So look, it's a hold for those reasons.

Guest picks

Chris Conway: To round out the episode, I've asked the gents to bring along a stock that they think is on the rise and has a bright future, provided they can execute. Nick, I'll stay with you. What have you got for us?

AerCap (NYSE: AER)

Nick Markiewicz: We really like AerCap at the moment. AerCap is a aircraft leasing company, it's the world's biggest leaser of aircraft. Think of it as a bank with wings. AerCap has a tremendous history. They've grown their book value per share 20-fold over 20 years. So they've done 15% CAGR in book value, which is really an incredible thing to do. We like it for two reasons. One is that the aircraft market today still remains incredibly tight. The reason being is that Boeing and Airbus lost two years of production through COVID at the same time that air travel demand actually went vertical. So a really tight aircraft market, that is translating to their earnings in a few different ways. Number one is that leasing rates are going up, so the amount they earn on aircraft is pushing higher, which is obviously a good thing. Lease extensions are very high, much higher than usual. Lease extensions on older aircraft are high and the rates on them are very positive.

And then the profit they're making or the gains on sale on older aircraft are actually very high as well. They're selling some aircraft for twice their book value, which is very encouraging for the value of the broader group. And the second reason we really like them is that the management team are probably some of the best capital allocators I think I've ever seen in my career. They are very, very conservative when they buy aircraft. They typically choose to buy aircraft when the market is stressed. So think the GFC, think COVID, these guys were buying aircraft hand over fist from the OEMs and all the airlines back off. And then guess what happens when demand returns? The airlines are desperate for the aircraft. So they're very good at buying aircraft, they're very good at buying other leasing companies, so they never waste a crisis, is what they say.

And then finally, they're very good at buying their own stock. So they're one of the few management teams that actually go hard on a buyback when their stock's falling, whereas some management teams actually suspend a buyback when their stock's falling and the market goes into a wobble. So you put those two factors together, I think they're going to keep compounding book value at very healthy rates. It trades at a slight premium to book today on valuation and I think that's totally wrong for a company that's grown book so effectively, generates a massive ROE spread on its cost of equity.

Chris Conway: So Nick AerCap for you, that was pretty compelling. Michael, what have you got for us?

Wise (LON: WISE)

Michael Poulsen: So our stock pitch is Wise. Wise is a foreign exchange transfer service helping people and businesses move money around the world. You might've used the service or you might've seen some of its advertising around. It predominantly competes with the banks’ foreign exchange transfers. The banks are not great at this. Their fees are high, they're not transparent, and often it takes quite an amount of time for your money to arrive. Sometimes you don't know when your money's going to arrive. Wise has counter-positioned itself against the banks by offering low fees that are transparent and fast transfers. So more than 90% of its transfers now arrive same day, and it's more than 70% that arrive instantaneously.

And it's able to do all of that and maintain really good profitability because it's built this very efficient infrastructure to transfer money. The infrastructure gets more efficient as it scales, and Wise transfers those scale benefits back to its customers using price as a weapon to win more market share. This is a massive market, it's multi-trillions of dollars. Wise is a very small portion of that. We think that it's got decades of potential runway of growth. The next opportunity for Wise is to serve as the payment rails for banks themselves to help banks improve their foreign exchange services, and it's won a few big accounts as a result, and we don't think the valuation anywhere near reflects the scale of the opportunity for the business going forward.

Chris Conway: There you have it, ladies and gentlemen. Two pretty compelling picks to round out this episode. If you enjoyed it, make sure to give it a like and don't forget to follow our YouTube channel. We're adding lots of great content every single week.