The S&P 500 is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here are two S&P 500 stocks that could deliver good returns and one best left off your watchlist.
One Stock to Sell:
Expeditors (EXPD)
Market Cap: $14.58 billion
Expeditors (NYSE: EXPD) offers air and ocean freight as well as brokerage services.
Why Do We Steer Clear of EXPD?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 21.2% annually over the last two years
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $107.51 per share, Expeditors trades at 19.6x forward price-to-earnings. If you’re considering EXPD for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
Monolithic Power Systems (MPWR)
Market Cap: $23.39 billion
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Are We Bullish on MPWR?
- Impressive 10.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Monolithic Power Systems’s stock price of $514.45 implies a valuation ratio of 29.4x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.
GE Aerospace (GE)
Market Cap: $178.9 billion
One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE: GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare.
Why Is GE a Top Pick?
- Annual revenue growth of 21.9% over the last two years was superb and indicates its market share increased during this cycle
- Free cash flow margin grew by 13 percentage points over the last five years, giving the company more chips to play with
- Rising returns on capital show management is finding more attractive investment opportunities
GE Aerospace is trading at $176.30 per share, or 31.9x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
