1 S&P 500 Stock on Our Watchlist and 2 We Question
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 leading the market forward and two best left off your watchlist.
Two Stocks to Sell:
Texas Instruments (TXN)
Market Cap: $231.8 billion
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.
Why Are We Wary of TXN?
- Annual sales growth of 3% over the last five years lagged behind its semiconductor peers as its large revenue base made it difficult to generate incremental demand
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 14.2 percentage points
- Earnings per share have contracted by 1.7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
Texas Instruments’s stock price of $253.50 implies a valuation ratio of 26.3x forward P/E. Check out our free in-depth research report to learn more about why TXN doesn’t pass our bar.
Old Dominion Freight Line (ODFL)
Market Cap: $38.52 billion
With its name deriving from the Commonwealth of Virginia’s nickname, Old Dominion (NASDAQ:ODFL) delivers less-than-truckload (LTL) and full-container load freight.
Why Do We Think Twice About ODFL?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Earnings per share have dipped by 5.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
Old Dominion Freight Line is trading at $184.64 per share, or 30.1x forward P/E. Dive into our free research report to see why there are better opportunities than ODFL.
One Stock to Watch:
AMETEK (AME)
Market Cap: $53.69 billion
Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.
Why Are We Fans of AME?
- Annual revenue growth of 9.8% over the last five years beat the sector average and underscores the unique value of its offerings
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 25.4%, and its operating leverage amplified its profits over the last five years
- AME is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
At $233.90 per share, AMETEK trades at 26.3x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.