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1 S&P 500 Stock Worth Your Attention and 2 We Avoid
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. Keeping that in mind, here is one S&P 500 stock that is leading the market forward and two that may struggle.
Two Stocks to Sell:
Tractor Supply (TSCO)
Market Cap: $17.63 billion
Started as a mail-order tractor parts business, Tractor Supply (NASDAQ:TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer.
Why Does TSCO Give Us Pause?
- Annual sales growth of 2.2% over the last three years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 3.5 percentage points
Tractor Supply is trading at $33.78 per share, or 16.8x forward P/E. Check out our free in-depth research report to learn more about why TSCO doesn’t pass our bar.
Align Technology (ALGN)
Market Cap: $10.87 billion
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ:ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Why Are We Cautious About ALGN?
- Sales trends were unexciting over the last two years as its 2.5% annual growth was below the typical healthcare company
- Earnings per share lagged its peers over the last five years as they only grew by 1.4% annually
- Diminishing returns on capital suggest its earlier profit pools are drying up
Align Technology’s stock price of $152.38 implies a valuation ratio of 12.7x forward P/E. Read our free research report to see why you should think twice about including ALGN in your portfolio.
One Stock to Watch:
Waters Corporation (WAT)
Market Cap: $40.28 billion
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE:WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Why Does WAT Stand Out?
- Projected revenue growth of 48.6% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Free cash flow margin of 14.9% is higher than many in the industry, giving it breathing room and optionality
- Industry-leading 27.1% return on capital demonstrates management’s skill in finding high-return investments
At $409.36 per share, Waters Corporation trades at 26.1x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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 Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.