
3 Mid-Cap Stocks Facing Headwinds
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.
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. That said, here are three mid-cap stocks to swipe left on and some alternatives you should look into instead.
Genuine Parts (GPC)
Market Cap: $16.12 billion
Largely targeting the professional customer, Genuine Parts (NYSE:GPC) sells auto and industrial parts such as batteries, belts, bearings, and machine fluids.
Why Is GPC Not Exciting?
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Annual sales growth of 4.2% over the last six years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
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Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
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Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 2.1 percentage points
At $115.19 per share, Genuine Parts trades at 14.1x forward price-to-earnings. Read our free research report to see why you should think twice about including GPC in your portfolio, it’s free .
Jabil (JBL)
Market Cap: $14.87 billion
With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE:JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.
Why Do We Think Twice About JBL?
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Customers postponed purchases of its products and services this cycle as its revenue declined by 11.6% annually over the last two years
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Flat earnings per share over the last two years lagged its peers
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Low free cash flow margin of 3.1% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
Jabil’s stock price of $138.21 implies a valuation ratio of 14.5x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than JBL .
Royalty Pharma (RPRX)
Market Cap: $13.73 billion
Pioneering a unique business model in the pharmaceutical industry since 1996, Royalty Pharma (NASDAQ:RPRX) acquires rights to receive portions of sales from successful biopharmaceutical products, providing funding to drug developers without conducting research itself.