Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.
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 is one mid-cap stock with massive growth potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
Lumen (LUMN)
Market Cap: $9.96 billion
With approximately 350,000 route miles of fiber optic cable spanning North America and the Asia Pacific, Lumen Technologies (NYSE:LUMN) operates a vast fiber optic network that provides communications, cloud connectivity, security, and IT solutions to businesses and consumers.
Why Do We Think LUMN Will Underperform?
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Customers postponed purchases of its products and services this cycle as its revenue declined by 10% annually over the last five years
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Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 17.8% annually, worse than its revenue
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7.3 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
Lumen is trading at $9.67 per share, or 0.9x forward price-to-sales. Check out our free in-depth research report to learn more about why LUMN doesn’t pass our bar.
Globe Life (GL)
Market Cap: $12.22 billion
With roots dating back to 1900 and a rebranding from Torchmark Corporation in 2019, Globe Life (NYSE:GL) is an insurance holding company that offers life insurance, supplemental health insurance, and annuity products through various distribution channels.
Why Is GL Not Exciting?
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4.5% annual revenue growth over the last two years was slower than its insurance peers
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Growth in insurance policies was lackluster over the last two years as its 4.9% annual growth underperformed the typical financial institution
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Products and services are facing profitability challenges during this cycle, as seen in its flat book value per share over the last five years
At $151.07 per share, Globe Life trades at 1.8x forward P/B. To fully understand why you should be careful with GL, check out our full research report (it’s free).
One Mid-Cap Stock to Watch:
Zebra (ZBRA)
Market Cap: $12.39 billion
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ:ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.