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. That said, here are two mid-cap stocks with long growth runways and one that may have trouble.
One Mid-Cap Stock to Sell:
Annaly Capital Management (NLY)
Market Cap: $15.88 billion
Operating as a real estate investment trust since 1996 with a focus on generating income from interest rate spreads, Annaly Capital Management (NYSE: NLY) is a diversified capital manager that invests in agency mortgage-backed securities, residential mortgage loans, and mortgage servicing rights.
Why Do We Steer Clear of NLY?
- Customers borrowered less money this cycle as its net interest income declined by 11.4% annually over the last five years
- Net interest margin of 0.7% reflects its high servicing and capital costs
- Earnings per share have contracted by 7.9% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
Annaly Capital Management’s stock price of $22.10 implies a valuation ratio of 1x forward P/B. Dive into our free research report to see why there are better opportunities than NLY.
Two Mid-Cap Stocks to Watch:
Leonardo DRS (DRS)
Market Cap: $12.53 billion
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ: DRS) is a provider of defense systems, electronics, and military support services.
Why Should DRS Be on Your Watchlist?
- Impressive 13.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings per share grew by 25% annually over the last two years and trumped its peers
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Leonardo DRS is trading at $47.35 per share, or 38.2x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
TD SYNNEX (SNX)
Market Cap: $16.03 billion
Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE: SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.
Why Does SNX Stand Out?
- Market share has increased this cycle as its 25.6% annual revenue growth over the last five years was exceptional
- Dominant market position is represented by its $65.14 billion in revenue and gives it fixed cost leverage when sales grow
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 15.6% exceeded its revenue gains over the last two years
At $199.50 per share, TD SYNNEX trades at 12.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
