1 Mid-Cap Stock to Own for Decades and 2 to Brush Off

1 Mid-Cap Stock to Own for Decades and 2 to Brush Off

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.

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. Keeping that in mind, here is one mid-cap stock with huge upside potential and two that may have trouble.

Two Mid-Cap Stocks to Sell:

Entegris (ENTG)

Market Cap: $15.23 billion

With fabs representing the company’s largest customer type, Entegris (NASDAQ:ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.

Why Does ENTG Fall Short?

  1. Sales were flat over the last two years, indicating it’s failed to expand this cycle

  2. Efficiency has decreased over the last five years as its operating margin fell by 4.8 percentage points

  3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.2 percentage points

Entegris’s stock price of $100.80 implies a valuation ratio of 27.9x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ENTG .

HP (HPQ)

Market Cap: $27.25 billion

Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE:HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.

Why Are We Out on HPQ?

  1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.7% annually over the last five years

  2. Projected sales growth of 3.5% for the next 12 months suggests sluggish demand

  3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

HP is trading at $28.96 per share, or 7.8x forward price-to-earnings. Read our free research report to see why you should think twice about including HPQ in your portfolio, it’s free .

One Mid-Cap Stock to Buy:

Natera (NTRA)

Market Cap: $20.18 billion

Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ:NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.

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