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 huge upside potential and one that may have trouble.
One Mid-Cap Stock to Sell:
Stanley Black & Decker (SWK)
Market Cap: $11.54 billion
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE:SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.
Why Should You Sell SWK?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings per share fell by 8.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Free cash flow margin dropped by 10.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Stanley Black & Decker’s stock price of $74.54 implies a valuation ratio of 13x forward P/E. Read our free research report to see why you should think twice about including SWK in your portfolio.
Two Mid-Cap Stocks to Watch:
Duolingo (DUOL)
Market Cap: $16.92 billion
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Why Is DUOL a Good Business?
- Monthly Active Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 311% annually, topping its revenue gains
- Strong free cash flow margin of 35% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
Duolingo is trading at $372.22 per share, or 52.9x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
W. R. Berkley (WRB)
Market Cap: $26.74 billion
Founded in 1967 and operating through more than 50 specialized insurance units across the globe, W. R. Berkley (NYSE:WRB) underwrites commercial insurance and reinsurance through specialized subsidiaries serving industries from healthcare to construction to transportation.
Why Is WRB on Our Radar?
- Strong 12.7% annualized net premiums earned expansion over the last five years shows it’s capturing market share this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 32% to outpace its revenue gains
- Projected book value per share growth of 28.2% for the next 12 months is above its two-year trend, pointing to accelerating profitability
At $70.50 per share, W. R. Berkley trades at 2.7x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 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-small-cap company Exlservice (+354% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.