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 swipe left on and some alternatives you should look into instead.
Entegris (ENTG)
Market Cap: $11.89 billion
With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Why Do We Avoid ENTG?
- Annual sales declines of 7.5% for the past two years show its products and services struggled to connect with the market during this cycle
- Anticipated sales growth of 2% for the next year implies demand will be shaky
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 6.7 percentage points
Entegris is trading at $80.50 per share, or 24.3x forward P/E. If you’re considering ENTG for your portfolio, see our FREE research report to learn more.
Norwegian Cruise Line (NCLH)
Market Cap: $11.11 billion
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE: NCLH) is a premier global cruise company.
Why Does NCLH Fall Short?
- Performance surrounding its passenger cruise days has lagged its peers
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Norwegian Cruise Line’s stock price of $24.59 implies a valuation ratio of 11x forward P/E. Dive into our free research report to see why there are better opportunities than NCLH.
Teledyne (TDY)
Market Cap: $25.16 billion
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.
Why Are We Wary of TDY?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- 2.5 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
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $536.59 per share, Teledyne trades at 23.8x forward P/E. Read our free research report to see why you should think twice about including TDY in your portfolio.
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