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 that may have trouble.

Two Mid-Cap Stocks to Sell:

Masco (MAS)

Market Cap: $15.37 billion

Headquartered just outside of Detroit, MI, Masco (NYSE: MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.

Why Do We Pass on MAS?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Projected sales growth of 1.3% for the next 12 months suggests sluggish demand
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $73.39 per share, Masco trades at 19.8x forward P/E. To fully understand why you should be careful with MAS, check out our full research report (it’s free).

Hologic (HOLX)

Market Cap: $14.93 billion

As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ: HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.

Why Are We Wary of HOLX?

1. Constant currency revenue growth has disappointed over the past two years and shows demand was soft
2. Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 23.6 percentage points
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Hologic’s stock price of $67.49 implies a valuation ratio of 15.4x forward P/E. If you’re considering HOLX for your portfolio, see our FREE research report to learn more.

One Mid-Cap Stock to Watch:

East West Bank (EWBC)

Market Cap: $14.49 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 Could EWBC Be a Winner?

1. Annual net interest income growth of 10.6% over the last five years beat the sector average and underscores the value of its loans
2. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Impressive 12% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle

East West Bank is trading at $105.14 per share, or 1.7x 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

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