Many investors pay attention to mid-cap stocks because they have established business models and expansive market opportunities. However, their paths to becoming $100 billion corporations are ripe with competition, ranging from giants with vast resources to agile upstarts eager to disrupt the status quo.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. Keeping that in mind, here is one mid-cap stock with a long growth runway and two best left ignored.
Two Mid-Cap Stocks to Sell:
Wayfair (W)
Market Cap: $10.25 billion
Founded in 2002 by Niraj Shah, Wayfair (NYSE: W) is a leading online retailer of mass-market home goods in the US, UK, Canada, and Germany.
Why Is W Not Exciting?
- Struggled with new customer acquisition as its active customers averaged 2.5% declines
- Anticipated sales growth of 5.2% for the next year implies demand will be shaky
- Gross margin of 30.2% reflects its high servicing costs
At $88.80 per share, Wayfair trades at 16.7x forward EV/EBITDA. Read our free research report to see why you should think twice about including W in your portfolio.
Verisk (VRSK)
Market Cap: $23.85 billion
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ: VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Why Does VRSK Worry Us?
- 1.9% annual revenue growth over the last five years was slower than its business services peers
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 9.3% annually
Verisk’s stock price of $183.47 implies a valuation ratio of 21.9x forward P/E. To fully understand why you should be careful with VRSK, check out our full research report (it’s free).
One Mid-Cap Stock to Watch:
MasTec (MTZ)
Market Cap: $27.96 billion
Involved in the 1996 Olympic Games MasTec (NYSE: MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.
Why Should MTZ Be on Your Watchlist?
- Backlog has averaged 24.1% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 18.2%
- Earnings per share have massively outperformed its peers over the last two years, increasing by 77.1% annually
MasTec is trading at $379.66 per share, or 42.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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