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. That said, here is one S&P 500 stock that is positioned to outperform and two that could be in trouble.
Two Stocks to Sell:
Applied Materials (AMAT)
Market Cap: $174.8 billion
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ: AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Why Are We Hesitant About AMAT?
- Projected sales decline of 2% for the next 12 months points to a tough demand environment ahead
- 2.7 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $219.87 per share, Applied Materials trades at 24.3x forward P/E. Read our free research report to see why you should think twice about including AMAT in your portfolio.
Hartford (HIG)
Market Cap: $36.2 billion
Recognizable by its iconic stag logo that dates back to 1810, The Hartford (NYSE: HIG) provides property and casualty insurance, group benefits, and investment products to individuals and businesses across the United States.
Why Is HIG Not Exciting?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 5.8% for the last five years
- Outsized scale creates growth headwinds as its 6.2% annualized net premiums earned increases over the last five years underperformed other financial institutions
- Large asset base makes it harder to grow book value per share quickly, and its annual book value per share growth of 5.4% over the last five years was below our standards for the insurance sector
Hartford’s stock price of $130 implies a valuation ratio of 2x forward P/B. Dive into our free research report to see why there are better opportunities than HIG.
One Stock to Watch:
Intuitive Surgical (ISRG)
Market Cap: $156.2 billion
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Why Is ISRG Interesting?
- Average unit sales growth of 11.4% over the past two years reflects steady demand for its products
- Estimated revenue growth of 14.2% for the next 12 months implies its momentum over the last two years will continue
- Earnings per share grew by 17.7% annually over the last five years, massively outpacing its peers
Intuitive Surgical is trading at $435.70 per share, or 51x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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