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.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. That said, here is one mid-cap stock with massive growth potential and two that may have trouble.
Two Mid-Cap Stocks to Sell:
Nordson (NDSN)
Market Cap: $15.72 billion
Founded in 1954, Nordson Corporation (NASDAQ: NDSN) manufactures dispensing equipment and industrial adhesives, sealants and coatings.
Why Does NDSN Give Us Pause?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.2%
- Eroding returns on capital suggest its historical profit centers are aging
Nordson’s stock price of $282.21 implies a valuation ratio of 23.7x forward P/E. If you’re considering NDSN for your portfolio, see our FREE research report to learn more.
TechnipFMC (FTI)
Market Cap: $27.41 billion
Operating a fleet of 16 specialized vessels that install equipment on the seafloor, TechnipFMC (NYSE: FTI) designs and manufactures subsea systems that control the flow of oil and natural gas from the ocean floor to processing facilities.
Why Does FTI Fall Short?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.5% annually over the last five years
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 18.1%
At $68.27 per share, TechnipFMC trades at 21.6x forward P/E. Check out our free in-depth research report to learn more about why FTI doesn’t pass our bar.
One Mid-Cap Stock to Buy:
Brown & Brown (BRO)
Market Cap: $19.66 billion
With roots dating back to 1939 and operations spanning 44 U.S. states and 14 countries, Brown & Brown (NYSE: BRO) is an insurance brokerage and risk management firm that markets and sells insurance products across property, casualty, and employee benefits sectors.
Why Are We Bullish on BRO?
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 18.5% annually
- Strong free cash flow margin of 23.2% enables it to reinvest or return capital consistently
Brown & Brown is trading at $58.94 per share, or 13x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
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