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1 S&P 500 Stock with Exciting Potential and 2 We Ignore
The S&P 500 (^GSPC) 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 is one S&P 500 stock that could deliver good returns and two best left off your watchlist.
Two Stocks to Sell:
GE HealthCare (GEHC)
Market Cap: $32.4 billion
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ:GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
Why Does GEHC Worry Us?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Projected sales growth of 4.4% for the next 12 months suggests sluggish demand
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 1.7 percentage points
GE HealthCare’s stock price of $71.73 implies a valuation ratio of 14x forward P/E. If you’re considering GEHC for your portfolio, see our FREE research report to learn more.
Wells Fargo (WFC)
Market Cap: $262.2 billion
Founded during the California Gold Rush in 1852 to provide banking and express delivery services to miners and merchants, Wells Fargo (NYSE:WFC) is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals and businesses.
Why Is WFC Risky?
- Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 6% over the last five years was below our standards for the banking sector
- Net interest margin shrank by 33.6 basis points (100 basis points = 1 percentage point) over the last two years, suggesting the profitability of its loan book is decreasing or the market is becoming more competitive
- Estimated tangible book value per share growth of 7.9% for the next 12 months is soft and implies weaker profitability
Wells Fargo is trading at $86.54 per share, or 1.5x forward P/B. Dive into our free research report to see why there are better opportunities than WFC.
One Stock to Watch:
Vertex Pharmaceuticals (VRTX)
Market Cap: $137.3 billion
Founded in 1989 with a mission to create medicines that treat the underlying causes of disease rather than just symptoms, Vertex Pharmaceuticals (NASDAQ:VRTX) develops and markets transformative medicines for serious diseases, with a focus on cystic fibrosis, sickle cell disease, and pain management.
Why Are We Positive on VRTX?
- Annual revenue growth of 20.5% over the last five years was superb and indicates its market share increased during this cycle
- Adjusted operating profits increased over the last two years as the company gained some leverage on its fixed costs and became more efficient
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $542.50 per share, Vertex Pharmaceuticals trades at 27.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.