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:
Snap-on (SNA)
Market Cap: $18.25 billion
Founded in 1920, Snap-on (NYSE: SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Why Are We Cautious About SNA?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Flat earnings per share over the last two years underperformed the sector average
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $350.95 per share, Snap-on trades at 17.4x forward P/E. Check out our free in-depth research report to learn more about why SNA doesn’t pass our bar.
Two Stocks to Watch:
Carvana (CVNA)
Market Cap: $56.6 billion
Known for its glass tower car vending machines, Carvana (NYSE: CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.
Why Is CVNA on Our Radar?
- Retail Units Sold have increased by an average of 31.4% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 38.5% annually, topping its revenue gains
- Free cash flow margin grew by 19.3 percentage points over the last few years, giving the company more chips to play with
Carvana’s stock price of $400.73 implies a valuation ratio of 24x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Raymond James (RJF)
Market Cap: $32.18 billion
Founded in 1962 and headquartered in St. Petersburg, Florida, Raymond James Financial (NYSE: RJF) is a diversified financial services company that provides wealth management, investment banking, asset management, and banking services to individuals and institutions.
Why Do We Love RJF?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 12% annual sales growth over the last five years
- Share buybacks propelled its annual earnings per share growth to 21.2%, which outperformed its revenue gains over the last five years
- Balance sheet strength has increased this cycle as its 14.4% annual tangible book value per share growth over the last two years was exceptional
Raymond James is trading at $163.60 per share, or 13.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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.
