The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. Keeping that in mind, here is one S&P 500 stock that is positioned to outperform and two best left off your watchlist.
Two Stocks to Sell:
Delta (DAL)
Market Cap: $53.02 billion
One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE:DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Why Are We Bearish on DAL?
- Sluggish trends in its revenue passenger miles suggest customers aren’t adopting its solutions as quickly as the company hoped
- Free cash flow margin is not anticipated to grow over the next year
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $81.26 per share, Delta trades at 10x forward P/E. If you’re considering DAL for your portfolio, see our FREE research report to learn more.
HP (HPQ)
Market Cap: $26.95 billion
Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE:HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.
Why Do We Pass on HPQ?
- Sales tumbled by 1.2% annually over the last five years, showing market trends are working against it during this cycle
- Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
- Earnings per share were flat over the last two years while its revenue grew, showing its incremental sales were less profitable
HP is trading at $29.52 per share, or 10.9x forward P/E. Read our free research report to see why you should think twice about including HPQ in your portfolio.
One Stock to Watch:
Lennox (LII)
Market Cap: $14.03 billion
Based in Texas and founded over a century ago, Lennox (NYSE:LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.
Why Are We Fans of LII?
- Excellent operating margin of 17.7% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled
- Free cash flow margin increased by 8.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- ROIC punches in at 37.3%, illustrating management’s expertise in identifying profitable investments
Lennox’s stock price of $413.10 implies a valuation ratio of 16.8x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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.