Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here are two mid-cap stocks with massive growth potential and one best left ignored.
One Mid-Cap Stock to Sell:
Stanley Black & Decker (SWK)
Market Cap: $12.92 billion
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.
Why Do We Think Twice About SWK?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Earnings per share have contracted by 15.4% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
Stanley Black & Decker’s stock price of $91.22 implies a valuation ratio of 16.9x forward P/E. Dive into our free research report to see why there are better opportunities than SWK.
Two Mid-Cap Stocks to Buy:
Omnicom Group (OMC)
Market Cap: $21.54 billion
With a vast network of creative agencies that helped craft some of the most memorable ad campaigns in history, Omnicom Group (NYSE: OMC) is a strategic holding company that provides advertising, marketing, and communications services to many of the world's largest companies.
Why Is OMC a Top Pick?
- Annual revenue growth of 15.4% over the last two years was superb and indicates its market share increased during this cycle
- Massive revenue base of $19.82 billion makes it a well-known name that influences purchasing decisions
- Free cash flow margin jumped by 6.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $76.00 per share, Omnicom Group trades at 6.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
ATI (ATI)
Market Cap: $27.23 billion
With its materials flying in nearly every commercial and military aircraft in service today, ATI (NYSE: ATI) produces highly specialized materials and components for aerospace, defense, medical, and energy applications using advanced metallurgy and manufacturing processes.
What Makes ATI Stand Out?
- Impressive 11.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin expanded by 21.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
ATI is trading at $194.75 per share, or 42.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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