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.
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. Keeping that in mind, here is one mid-cap stock with huge upside potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
Hormel Foods (HRL)
Market Cap: $13.05 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 Should You Dump HRL?
- Falling unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Gross margin of 16.6% is an output of its commoditized products
- Sales were less profitable over the last three years as its earnings per share fell by 7% annually, worse than its revenue declines
At $23.75 per share, Hormel Foods trades at 16x forward P/E. Read our free research report to see why you should think twice about including HRL in your portfolio.
Markel Group (MKL)
Market Cap: $24.25 billion
Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE: MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.
Why Are We Cautious About MKL?
- Scale presents growth limitations compared to smaller competitors, evidenced by its below-average 2.9% annualized growth in net premiums earned for the last two years
- Projected sales decline of 4.9% for the next 12 months points to a tough demand environment ahead
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 8% annually
Markel Group’s stock price of $1,944 implies a valuation ratio of 1.4x forward P/B. Dive into our free research report to see why there are better opportunities than MKL.
One Mid-Cap Stock to Watch:
The Ensign Group (ENSG)
Market Cap: $10.05 billion
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ: ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Why Could ENSG Be a Winner?
- Average unit sales growth of 12.2% over the past two years reflects steady demand for its products
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 17.3% annually
The Ensign Group is trading at $176.50 per share, or 25.9x 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
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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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