1 mid-cap stock for long-term investors and 2 we find risky
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.
These dynamics can rattle even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. That said, here is one mid-cap stock with a long growth runway and two that may have trouble.
Two mid-cap stocks to sell:
Wintrust Financial (WTFC)
Market cap: $10.4 billion
Founded in 1991 as a community-focused alternative to big banks in the Chicago area, Wintrust Financial (NASDAQGS:WTFC) operates community banks in the Chicago area and provides specialty finance services including insurance premium financing and wealth management.
Why Are We Wary of WTFC?
- Net interest margin grew by 1.3 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more chips to play with
- Capital trends were unexciting over the last two years as its 7.6% annual tangible book value per share growth was below the typical banking firm
At $154.18 per share, Wintrust Financial trades at 1.4x forward P/B. To fully understand why you should be careful with WTFC, check out our full research report (it’s free).
KeyCorp (KEY)
Market cap: $22.74 billion
Tracing its roots back to 1849 during the California Gold Rush era, KeyCorp (NYSE:KEY) operates KeyBank, a full-service regional bank providing retail and commercial banking, wealth management, and investment services across 15 states.
Why Are We Cautious About KEY?
- 4.2% annual net interest income growth over the last five years was slower than its banking peers
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 6.7% annually
- Tangible book value per share tumbled by 2.2% annually over the last five years, showing banking sector trends are working against it during this cycle
KeyCorp’s stock price of $21.25 implies a valuation ratio of 1.4x forward P/B. Check out our free in-depth research report to learn more about why KEY doesn’t pass our bar.
One mid-cap stock to buy:
Ulta (ULTA)
Market cap: $27.72 billion
Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ:ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.
Why Should You Buy ULTA?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Comparable store sales rose by 4.1% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Ulta is trading at $649.14 per share, or 20.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks we like even more
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.