Mid-cap stocks have the best odds of scaling into $100 billion corporations thanks to their tested business models and large addressable markets. But the many opportunities in front of them attract significant competition, spanning from industry behemoths with seemingly infinite resources to small, nimble players with chips on their shoulders.
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. Keeping that in mind, here are three mid-cap stocks to avoid and some other investments you should consider instead.
The New York Times (NYT)
Market cap: $10.48 billion
Founded in 1851, The New York Times (NYSE: NYT) is an American media organization known for its influential newspaper and expansive digital journalism platforms.
Why Do We Pass on NYT?
- Sluggish trends in its subscribers suggest customers aren’t adopting its solutions as quickly as the company hoped
- Projected 2.5 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- ROIC of 16.9% reflects management’s challenges in identifying attractive investment opportunities
The New York Times is trading at $66.47 per share, or 21.9x forward P/E. Check out our free in-depth research report to learn more about why NYT doesn’t pass our bar.
Tyson Foods (TSN)
Market cap: $21.09 billion
Started as a simple trucking business, Tyson Foods (NYSE: TSN) is one of the world’s largest producers of chicken, beef, and pork.
Why Are We Bearish on TSN?
- Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 6.9%
Tyson Foods’s stock price of $60.10 implies a valuation ratio of 17.3x forward P/E. To fully understand why you should be careful with TSN, check out our full research report (it’s free).
Packaging Corporation of America (PKG)
Market cap: $22.03 billion
Founded in 1959, Packaging Corporation of America (NYSE: PKG) produces containerboard and corrugated packaging products as well as displays and package protection.
Why Are We Wary of PKG?
- Sales trends were unexciting over the last five years as its 5.8% annual growth was below the typical industrials company
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 6.3 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
At $248.77 per share, Packaging Corporation of America trades at 19.2x forward P/E. Read our free research report to see why you should think twice about including PKG in your portfolio.
Stocks we like 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.
