1 Mid-Cap Stock on Our Buy List and 2 We Question

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.

This is precisely where StockStory comes in - we do the heavy lifting to identify companies with solid fundamentals so you can invest with confidence. Keeping that in mind, here is one mid-cap stock with massive growth potential and two best left ignored.

Two Mid-Cap Stocks to Sell:

Builders FirstSource (BLDR)

Market Cap: $15.78 billion

Headquartered in Irving, TX, Builders FirstSource (NYSE:BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.

Why Is BLDR Not Exciting?

1. Annual sales declines of 7.2% for the past two years show its products and services struggled to connect with the market during this cycle
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Builders FirstSource’s stock price of $143.20 implies a valuation ratio of 16.6x forward P/E. To fully understand why you should be careful with BLDR, check out our full research report (it’s free).

Invesco (IVZ)

Market Cap: $10 billion

With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE:IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.

Why Do We Pass on IVZ?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last five years
2. Earnings per share have contracted by 2.8% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. ROE of 5.8% reflects management’s challenges in identifying attractive investment opportunities

At $22.43 per share, Invesco trades at 11.7x forward P/E. Read our free research report to see why you should think twice about including IVZ in your portfolio.

One Mid-Cap Stock to Buy:

LPL Financial (LPLA)

Market Cap: $28.05 billion

As the nation's largest independent broker-dealer with no proprietary products of its own, LPL Financial (NASDAQ:LPLA) provides technology, compliance, and business support services to independent financial advisors and institutions who manage investments for retail clients.

Why Is LPLA a Good Business?

1. Annual revenue growth of 22.6% over the last two years was superb and indicates its market share increased during this cycle
2. Additional sales over the last five years increased its profitability as the 21.3% annual growth in its earnings per share outpaced its revenue
3. Stellar return on equity showcases management’s ability to surface highly profitable business ventures

LPL Financial is trading at $349.94 per share, or 17.3x forward P/E. Is now the time to initiate a position? See for yourself 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 6 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-micro-cap company Kadant (+351% 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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