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 are three mid-cap stocks to avoid and some other investments you should consider instead.

MasTec (MTZ)

Market Cap: $14.45 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 Does MTZ Give Us Pause?

1. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 13.2%
2. Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
3. 4.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

MasTec’s stock price of $186.19 implies a valuation ratio of 31.7x forward P/E. To fully understand why you should be careful with MTZ, check out our full research report (it’s free).

Trimble (TRMB)

Market Cap: $20.34 billion

Playing a role in the construction of the Paris Grand, Trimble (NASDAQ: TRMB) offers geospatial devices and technology to the agriculture, construction, transportation, and logistics industries.

Why Should You Sell TRMB?

1. 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
2. Forecasted revenue decline of 2.5% for the upcoming 12 months implies demand will fall off a cliff
3. Free cash flow margin shrank by 9.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Trimble is trading at $85.40 per share, or 28.5x forward P/E. If you’re considering TRMB for your portfolio, see our FREE research report to learn more.

Globe Life (GL)

Market Cap: $11.15 billion

With roots dating back to 1900 and a rebranding from Torchmark Corporation in 2019, Globe Life (NYSE: GL) is an insurance holding company that offers life insurance, supplemental health insurance, and annuity products through various distribution channels.

Why Are We Hesitant About GL?

1. 4.6% annual revenue growth over the last two years was slower than its insurance peers
2. Premium trends were unexciting over the last two years as its 4.4% annual growth was below the typical insurance company
3. Book value per share tumbled by 2.4% annually over the last five years, showing insurance sector trends are working against its favor during this cycle

At $134.99 per share, Globe Life trades at 1.9x forward P/B. Check out our free in-depth research report to learn more about why GL doesn’t pass our bar.

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