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.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. 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:
Stanley Black & Decker (SWK)
Market Cap: $13.34 billion
With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE: SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry.
Why Do We Steer Clear of SWK?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
Stanley Black & Decker is trading at $88.02 per share, or 15.5x forward P/E. Check out our free in-depth research report to learn more about why SWK doesn’t pass our bar.
Invesco (IVZ)
Market Cap: $13.47 billion
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE: IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Are We Cautious About IVZ?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 1.5% annually
At $30.52 per share, Invesco trades at 10x forward P/E. To fully understand why you should be careful with IVZ, check out our full research report (it’s free).
One Stock to Watch:
Lululemon (LULU)
Market Cap: $10.17 billion
Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Why Are We Fans of LULU?
- Fast expansion of new stores indicates an aggressive approach to attacking untapped market opportunities
- Differentiated product assortment leads to a best-in-class gross margin of 57%
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 20.3%
Lululemon’s stock price of $91.73 implies a valuation ratio of 11.2x 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 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
