Mid-cap companies are ones that typically have a market cap between $2-10 billion. They can be an essential addition to an investment portfolio in that it increases exposure to a broader range of companies with different market capitalization. Investors should look to investing in large-cap, mid-cap, and small-cap companies. Companies with a robust business model and low market capitalization may offer investors a good value investment, and they may see substantial growth over time because strong companies sometimes start out with a small market cap.
The companies I discuss below all fall into the range of mid-cap stocks. These are companies that investors should avoid at this time due to the growing uncertainty that surrounds these mid-cap companies, such as lingering financial issues, leadership changes, and poor future outlook.
Hertz Global (HTZ)
Hertz Global (NASDAQ:HTZ) is a vehicle rental company that’s based in Estero, Florida. Hertz Global operates under multiple brands, including Thrifty, Dollar, and Firefly, and operates company-owned as well as franchised locations internationally.
Over the past year, Hertz Global has seen a 31% drop in its share price. It has had issues with profitability even in the improved environment surrounding the tourism industry. Also, it has seen some leadership changes recently, bringing into question the future stability of Hertz Global.
Their second-quarter earnings results, which were released on July 27, stated that net income fell by 85% overall and total revenue grew by 4% compared to results from the year before. Hertz has recently seen multiple leadership changes within the company, including the appointment of Alexandra Brooks as their new Senior Vice President and Chief Financial Officer, announced on July 26. In addition, Paul Stone, Hertz’s Chief Operating Officer will leave the company effective September 30 to pursue business in the retail sector, which leaves them searching for a new COO. Since this news broke back on September 13, Hertz Global’s share price has fallen by 29%.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) is headquartered in Latham, New York, and engages in the production of hydrogen fuel cell systems for uses in the overall power market as well as zero-emission vehicles. Plug Power offers products such as GenDrive, a hydrogen fuel cell system that gives Power to electric cars; GenCare, a service program that helps with maintenance regarding their other products; and GenFuel, a hydrogen fuel delivery system.
Plug Power has seen continued strength in their revenue figures, which in their second quarter earning results saw an increase of 72% compared to the year before. But, they also have seen a growing net loss of 36% within the same time period.
Plug Power also sent out a press release on August 30 regarding a settlement with SEC, which involved a penalty of $1.25 million due to discrepancies in their multiple 10-Ks and 10-Qs from 2018 to 2020.
Over the past year, Plug Power’s stock price has fallen by 72%, partly due to continued issues with operating margins.
Wolfspeed (WOLF)
Wolfspeed (NYSE:WOLF), located in Durham, North Carolina, is a semiconductor company that provides silicon carbide and gallium nitride tech for U.S. and international customers. It also offers power devices for a wide range of uses, including military, commercial, and telecommunication applications.
Wolfspeed has seen a drastic drop in their share price so far this year of 65%. This is due to growing profitably concerns and delays in production. On August 16, it released earnings for the three months ended June 25, 2023. Which stated revenue grew by 3%, and they experienced a net loss of $113 million. Wolfspeed also announced that it has received $5 billion in funding to help with plans for factory expansion for multiple locations.
In recent news, Wolfspeed announced that it will be selling its radio frequency business to MACOM Technology (NASDAQ:MTSI) for approximately $125 million.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
