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. Keeping that in mind, here is one mid-cap stock with huge upside potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
Church & Dwight (CHD)
Market Cap: $22.83 billion
Best known for its Arm & Hammer baking soda, Church & Dwight (NYSE:CHD) is a household and personal care products company with a vast portfolio that spans laundry detergent to toothbrushes to hair removal creams.
Why Are We Wary of CHD?
- 4.1% annual revenue growth over the last three years was slower than its consumer staples peers
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
At $96.35 per share, Church & Dwight trades at 24.8x forward P/E. Dive into our free research report to see why there are better opportunities than CHD.
Ally Financial (ALLY)
Market Cap: $13.97 billion
Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE:ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients.
Why Should You Dump ALLY?
- Sales trends were unexciting over the last two years as its 2.7% annual growth was below the typical financials company
- Earnings per share fell by 4.8% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- High net-debt-to-EBITDA ratio of 8× could force the company to raise capital on unfavorable terms if market conditions deteriorate
Ally Financial is trading at $45.98 per share, or 8x forward P/E. If you’re considering ALLY for your portfolio, see our FREE research report to learn more.
One Mid-Cap Stock to Watch:
Kratos (KTOS)
Market Cap: $9.03 billion
Established with a commitment to supporting national security, Kratos (NASDAQ:KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Is KTOS on Our Radar?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 14.6% over the past two years
- Exciting sales outlook for the upcoming 12 months calls for 29.9% growth, an acceleration from its two-year trend
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 15.8% annually
Kratos’s stock price of $48.26 implies a valuation ratio of 60.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.