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1 Mid-Cap Stock for Long-Term Investors and 2 Facing Challenges
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.
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 is one mid-cap stock with a long growth runway and two that may have trouble.
Two Mid-Cap Stocks to Sell:
Best Buy (BBY)
Market Cap: $17.99 billion
With humble beginnings as a stereo equipment seller, Best Buy (NYSE:BBY) now sells a broad selection of consumer electronics, appliances, and home office products.
Why Do We Steer Clear of BBY?
- Store closures and disappointing same-store sales suggest demand is sluggish and it’s rightsizing its operations
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 22.6% that must be offset through higher volumes
Best Buy is trading at $85.00 per share, or 12.5x forward P/E. To fully understand why you should be careful with BBY, check out our full research report (it’s free).
Invesco (IVZ)
Market Cap: $13.43 billion
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE:IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Do We Avoid IVZ?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Sales over the last five years were less profitable as its earnings per share fell by 1.1% annually while its revenue was flat
- High net-debt-to-EBITDA ratio of 6× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Invesco’s stock price of $30.40 implies a valuation ratio of 9.9x forward P/E. Check out our free in-depth research report to learn more about why IVZ doesn’t pass our bar.
One Mid-Cap Stock to Watch:
MACOM (MTSI)
Market Cap: $22.36 billion
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Are We Fans of MTSI?
- Annual revenue growth of 29.8% over the last two years was superb and indicates its market share increased during this cycle
- Sales outlook for the upcoming 12 months calls for 36.5% growth, an acceleration from its two-year trend
- Earnings per share grew by 18.4% annually over the last five years, comfortably beating the peer group average
At $292.51 per share, MACOM trades at 48.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.