Mid-cap stocks have the best odds of scaling into $100 billion corporations thanks to their tested business models and large addressable markets. But the many opportunities in front of them attract significant competition, spanning from industry behemoths with seemingly infinite resources to small, nimble players with chips on their shoulders.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are two mid-cap stocks with massive growth potential and one that could be down big.
One Mid-Cap Stock to Sell:
General Mills (GIS)
Market Cap: $18.04 billion
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE: GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
Why Do We Steer Clear of GIS?
- Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 8.1% annually, worse than its revenue
At $33.96 per share, General Mills trades at 10.2x forward P/E. To fully understand why you should be careful with GIS, check out our full research report (it’s free).
Two Mid-Cap Stocks to Watch:
Woodward (WWD)
Market Cap: $22.06 billion
Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ: WWD) designs, services, and manufactures energy control products and optimization solutions.
Why Are We Bullish on WWD?
- Impressive 13% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 19.9% exceeded its revenue gains over the last two years
Woodward is trading at $370.44 per share, or 37.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
W. R. Berkley (WRB)
Market Cap: $24.72 billion
Founded in 1967 and operating through more than 50 specialized insurance units across the globe, W. R. Berkley (NYSE: WRB) underwrites commercial insurance and reinsurance through specialized subsidiaries serving industries from healthcare to construction to transportation.
Why Does WRB Catch Our Eye?
- Net premiums earned surged by 12.1% annually over the past five years, reflecting strong market share gains this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 30.6% exceeded its revenue gains over the last five years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
W. R. Berkley’s stock price of $66.43 implies a valuation ratio of 2.4x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
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