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.
These dynamics can rattle even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here is one mid-cap stock with huge upside potential and two that may have trouble.
Two Mid-Cap Stocks to Sell:
Hormel Foods (HRL)
Market Cap: $13.39 billion
Best known for its SPAM brand, Hormel (NYSE: HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Why Do We Avoid HRL?
- Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 16.4%
- Sales over the last three years were less profitable as its earnings per share fell by 9.2% annually while its revenue was flat
Hormel Foods’s stock price of $24.31 implies a valuation ratio of 16.4x forward P/E. If you’re considering HRL for your portfolio, see our FREE research report to learn more.
Assurant (AIZ)
Market Cap: $11.16 billion
With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE: AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.
Why Are We Cautious About AIZ?
- Annual sales growth of 5.1% over the last five years lagged behind its insurance peers as its large revenue base made it difficult to generate incremental demand
- Net premiums earned only expanded by 4.6% annually over the last five years, trailing its insurance peers as its scale limited incremental business
- Sizable asset base leads to capital growth challenges as its 2.7% annual book value per share increases over the last five years fell short of other insurance companies
At $222.86 per share, Assurant trades at 1.9x forward P/B. To fully understand why you should be careful with AIZ, check out our full research report (it’s free for active Edge members).
One Mid-Cap Stock to Buy:
First Solar (FSLR)
Market Cap: $27.64 billion
Headquartered in Arizona, First Solar (NASDAQ: FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.
Why Will FSLR Beat the Market?
- Annual revenue growth of 26.4% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 71.6% outpaced its revenue gains
- Free cash flow margin is now positive, showing the company is at an important crossroads
First Solar is trading at $257.60 per share, or 11.7x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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