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. That said, here is one mid-cap stock with huge upside potential and two best left ignored.
Two Mid-Cap Stocks to Sell:
XPO (XPO)
Market Cap: $14.95 billion
Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE: XPO) is a transportation company specializing in expedited shipping services.
Why Do We Avoid XPO?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 6.5% annually over the last five years
- Flat earnings per share over the last two years lagged its peers
- Free cash flow margin shrank by 6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
XPO’s stock price of $126.93 implies a valuation ratio of 31.2x forward P/E. If you’re considering XPO for your portfolio, see our FREE research report to learn more.
Packaging Corporation of America (PKG)
Market Cap: $19.34 billion
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.
Why Does PKG Worry Us?
- Sales trends were unexciting over the last two years as its 3.7% annual growth was below the typical industrials company
- Gross margin of 22.7% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Earnings per share lagged its peers over the last two years as they only grew by 1.1% annually
Packaging Corporation of America is trading at $216.45 per share, or 20.2x forward P/E. Read our free research report to see why you should think twice about including PKG in your portfolio.
One Mid-Cap Stock to Watch:
Jack Henry (JKHY)
Market Cap: $11.72 billion
Founded in 1976 by two entrepreneurs who saw the need for specialized banking software in the early days of financial computing, Jack Henry & Associates (NASDAQ: JKHY) provides technology solutions that help banks and credit unions innovate, differentiate, and compete while serving the evolving needs of their accountholders.
Why Is JKHY Interesting?
- Incremental sales were more profitable as its annual earnings per share growth of 11.5% outstripped its revenue performance
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $160.01 per share, Jack Henry trades at 25.4x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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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