
1 Mid-Cap Stock with Exciting Potential and 2 to Turn Down
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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here is one mid-cap stock with massive growth potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
IDEX (IEX)
Market Cap: $13.07 billion
Founded in 1988, IDEX (NYSE:IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.
Why Should You Sell IEX?
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Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
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Earnings per share fell by 1.5% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
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Eroding returns on capital suggest its historical profit centers are aging
IDEX is trading at $173 per share, or 20.3x forward price-to-earnings. Read our free research report to see why you should think twice about including IEX in your portfolio, it’s free .
United Airlines (UAL)
Market Cap: $22.27 billion
Founded in 1926, United Airlines Holdings (NASDAQ:UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Should You Dump UAL?
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Demand for its offerings was relatively low as its number of revenue passenger miles has underwhelmed
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Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 6.8 percentage points over the next year
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Below-average returns on capital indicate management struggled to find compelling investment opportunities
United Airlines’s stock price of $68.42 implies a valuation ratio of 6.4x forward price-to-earnings. If you’re considering UAL for your portfolio, see our FREE research report to learn more .
One Mid-Cap Stock to Buy:
Samsara (IOT)
Market Cap: $22.44 billion
One of the few public companies where Marc Andreessen is a Board member, Samsara (NYSE:IOT) provides software and hardware to track industrial equipment, assets, and fleets.
Why Will IOT Outperform?
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ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
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Market share will likely rise over the next 12 months as its expected revenue growth of 22.8% is robust
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Operating margin improvement of 19.3 percentage points over the last year demonstrates its ability to scale efficiently