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. That said, here is one mid-cap stock with huge upside potential and two that could be down big.
Two Mid-Cap Stocks to Sell:
Warner Music Group (WMG)
Market Cap: $14.28 billion
Launching the careers of legendary artists like Frank Sinatra, Warner Music Group (NASDAQ: WMG) is a music company managing a diverse portfolio of artists, recordings, and music publishing services worldwide.
Why Do We Steer Clear of WMG?
- Sales trends were unexciting over the last five years as its 7.7% annual growth was below the typical consumer discretionary company
- Free cash flow margin is expected to remain in place over the coming year
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $27.33 per share, Warner Music Group trades at 15.9x forward P/E. Dive into our free research report to see why there are better opportunities than WMG.
Markel Group (MKL)
Market Cap: $21.5 billion
Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE: MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.
Why Are We Out on MKL?
- Insurance offerings faced market headwinds this cycle, reflected in stagnant net premiums earned over the last two years
- Projected sales decline of 2.7% for the next 12 months points to a tough demand environment ahead
- Costs have risen faster than its revenue over the last five years, causing its pre-tax profit margin to decline by 14.1 percentage points
Markel Group is trading at $1,735 per share, or 1.1x forward P/B. Read our free research report to see why you should think twice about including MKL in your portfolio.
One Mid-Cap Stock to Buy:
Sterling (STRL)
Market Cap: $15.71 billion
Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ: STRL) provides civil infrastructure construction.
Why Do We Love STRL?
- Impressive 28.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- STRL is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
- Returns on capital are climbing as management makes more lucrative bets
Sterling’s stock price of $512.55 implies a valuation ratio of 22.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
