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.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. 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:
Lincoln Electric (LECO)
Market Cap: $13.5 billion
Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries.
Why Are We Hesitant About LECO?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.9% annually
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $245.37 per share, Lincoln Electric trades at 23.2x forward P/E. To fully understand why you should be careful with LECO, check out our full research report (it’s free for active Edge members).
East West Bank (EWBC)
Market Cap: $15.18 billion
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ:EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Why Are We Wary of EWBC?
- Annual revenue growth of 4.2% over the last two years was below our standards for the banking sector
- Net interest margin shrank by 25.3 basis points (100 basis points = 1 percentage point) over the last two years, suggesting the profitability of its loan book is decreasing or the market is becoming more competitive
- Incremental sales over the last two years were less profitable as its earnings per share were flat while its revenue grew
East West Bank is trading at $110.34 per share, or 1.7x forward P/B. Read our free research report to see why you should think twice about including EWBC in your portfolio.
One Mid-Cap Stock to Buy:
Pinterest (PINS)
Market Cap: $18.07 billion
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Why Is PINS a Good Business?
- Monthly Active Users have grown by 11.2% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Healthy EBITDA margin of 28.3% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last few years
- PINS 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
Pinterest’s stock price of $27.84 implies a valuation ratio of 13.6x forward EV/EBITDA. Is now the right time to buy? 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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