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 are two S&P 500 stocks positioned to outperform and one best left off your watchlist.
One Stock to Sell:
Halliburton (HAL)
Market Cap: $29.45 billion
Behind nearly every oil and gas well drilled worldwide, Halliburton (NYSE: HAL) provides drilling, completion, and production services that help oil and gas companies extract hydrocarbons from underground reservoirs.
Why Are We Wary of HAL?
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 16.8%
Halliburton is trading at $35.28 per share, or 14.5x forward P/E. Read our free research report to see why you should think twice about including HAL in your portfolio.
Two Stocks to Watch:
Western Digital (WDC)
Market Cap: $177.1 billion
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Are We Positive on WDC?
- Projected revenue growth of 43.7% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Efficiency rose over the last five years as its Operating margin increased by 17.3 percentage points
- Free cash flow margin expanded by 17.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $505.50 per share, Western Digital trades at 34.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Vertiv (VRT)
Market Cap: $117 billion
Formerly part of Emerson Electric, Vertiv (NYSE: VRT) manufactures and services infrastructure technology products for data centers and communication networks.
Why Do We Love VRT?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 23.7% over the past two years
- Free cash flow margin expanded by 22.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Returns on capital are growing as management capitalizes on its market opportunities
Vertiv’s stock price of $304.40 implies a valuation ratio of 44.4x 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
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.
