While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here are two S&P 500 stocks positioned to outperform and one best left off your watchlist.
One Stock to Sell:
C.H. Robinson Worldwide (CHRW)
Market Cap: $17.28 billion
Engaging in contracts with tens of thousands of transportation companies, C.H. Robinson (NASDAQ: CHRW) offers freight transportation and logistics services.
Why Does CHRW Give Us Pause?
- Sales tumbled by 2.3% annually over the last five years, showing market trends are working against it during this cycle
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 7.5%
- Waning returns on capital imply its previous profit engines are losing steam
C.H. Robinson Worldwide’s stock price of $147.89 implies a valuation ratio of 21.6x forward P/E. If you’re considering CHRW for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Cadence Design Systems (CDNS)
Market Cap: $86.21 billion
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Are We Fans of CDNS?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 17.9% over the last year
- Prominent and differentiated software results in a best-in-class gross margin of 86.8%
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Cadence Design Systems is trading at $313.66 per share, or 14x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Texas Pacific Land (TPL)
Market Cap: $25.52 billion
One of America's largest private landowners with roughly 868,000 acres in the Permian Basin, Texas Pacific Land (NYSE: TPL) owns land in West Texas and earns revenue from oil and gas royalties, water services, and land leases.
Why Is TPL a Top Pick?
- Market share has increased this cycle as its 31.1% annual revenue growth over the last ten years was exceptional
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 94.9%
- Robust free cash flow margin of 63% gives it many options for capital deployment
At $369.75 per share, Texas Pacific Land trades at 27.5x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
