Anthony Lee
3 min read
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.
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 are two mid-cap stocks with long growth runways and one that could be down big.
One Mid-Cap Stock to Sell:
Deckers (DECK)
Market Cap: $10.7 billion
Established in 1973, Deckers (NYSE:DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.
Why Should You Sell DECK?
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Weak constant currency growth over the past two years indicates challenges in maintaining its market share
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Subpar operating margin of 23.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats
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Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 18.8% for the last two years
At $78.80 per share, Deckers trades at 10.5x forward P/E. Read our free research report to see why you should think twice about including DECK in your portfolio, it’s free.
Two Mid-Cap Stocks to Watch:
RB Global (RBA)
Market Cap: $15.34 billion
Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE:RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries.
Why Does RBA Stand Out?
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Market share has increased this cycle as its 27.4% annual revenue growth over the last five years was exceptional
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Adjusted operating margin expanded by 3.2 percentage points over the last five years as it scaled and became more efficient
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Earnings per share grew by 19.3% annually over the last five years and trumped its peers
RB Global is trading at $83.24 per share, or 17.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Texas Pacific Land (TPL)
Market Cap: $23.16 billion
One of America’s largest private landowners with roughly 868,000 acres in the Permian Basin, Texas Pacific Land (NYSE:TPL) owns land in West Texas and earns revenue from oil and gas royalties, water services, and land leases.
Why Will TPL Beat the Market?
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Market share has increased this cycle as its 31.1% annual revenue growth over the last ten years was exceptional
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Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 94.9%
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Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
