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.
This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. Keeping that in mind, here is one mid-cap stock with massive growth potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
Avery Dennison (AVY)
Market Cap: $13.86 billion
Founded as Kum Kleen Products, Avery Dennison (NYSE: AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.
Why Are We Cautious About AVY?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $179.36 per share, Avery Dennison trades at 17.2x forward P/E. Dive into our free research report to see why there are better opportunities than AVY.
Solventum (SOLV)
Market Cap: $14.82 billion
Founded in 1985, Solventum (NYSE: SOLV) develops, manufactures, and commercializes a portfolio of healthcare products and services addressing critical customer and therapeutic patient needs.
Why Are We Out on SOLV?
- 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 tank by 5.3% over the next 12 months as demand evaporates
- Capital intensity has ramped up over the last four years as its free cash flow margin decreased by 30.1 percentage points
Solventum’s stock price of $85.42 implies a valuation ratio of 13.7x forward P/E. Check out our free in-depth research report to learn more about why SOLV doesn’t pass our bar.
One Mid-Cap Stock to Buy:
Nextracker (NXT)
Market Cap: $13.44 billion
With its technology playing a key role in the massive 1.2 gigawatt Noor Abu Dhabi solar farm project, Nextracker (NASDAQ: NXT) is a provider of solar tracker systems that help solar panels follow the sun.
Why Are We Bullish on NXT?
- Average backlog growth of 56.9% over the past two years shows it has a steady sales pipeline that will drive future orders
- Free cash flow margin grew by 15.6 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are climbing as management makes more lucrative bets
Nextracker is trading at $90.56 per share, or 21.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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