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 two mid-cap stocks with long growth runways and one that could be down big.
One Mid-Cap Stock to Sell:
Masco (MAS)
Market Cap: $14.74 billion
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Do We Think MAS Will Underperform?
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Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
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Flat earnings per share over the last two years underperformed the sector average
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Diminishing returns on capital suggest its earlier profit pools are drying up
Masco is trading at $72.40 per share, or 17.1x forward P/E. Dive into our free research report to see why there are better opportunities than MAS.
Two Mid-Cap Stocks to Buy:
SPX Technologies (SPXC)
Market Cap: $11.55 billion
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE:SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
Why Are We Bullish on SPXC?
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Annual revenue growth of 14.1% over the last two years was superb and indicates its market share increased during this cycle
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Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
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Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 25.3% annually
SPX Technologies’s stock price of $231.59 implies a valuation ratio of 29.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Watts Water Technologies (WTS)
Market Cap: $11 billion
Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Why Should You Buy WTS?
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Annual revenue growth of 10.1% over the last five years beat the sector average and underscores the unique value of its offerings
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Share repurchases have amplified shareholder returns as its annual earnings per share growth of 22.2% exceeded its revenue gains over the last five years
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Free cash flow margin jumped by 6.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

