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.
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 is one S&P 500 stock that is positioned to outperform and two that could be in trouble.
Two Stocks to Sell:
Zimmer Biomet (ZBH)
Market Cap: $17.89 billion
With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE: ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.
Why Does ZBH Worry Us?
- Muted 4.5% annual revenue growth over the last five years shows its demand lagged behind its healthcare peers
- Estimated sales growth of 3.9% for the next 12 months implies demand will slow from its two-year trend
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $92.35 per share, Zimmer Biomet trades at 11.1x forward P/E. To fully understand why you should be careful with ZBH, check out our full research report (it’s free).
Charles River Laboratories (CRL)
Market Cap: $8.28 billion
Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE: CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.
Why Are We Hesitant About CRL?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Forecasted revenue decline of 1.9% for the upcoming 12 months implies demand will fall even further
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Charles River Laboratories’s stock price of $166.49 implies a valuation ratio of 16.7x forward P/E. If you’re considering CRL for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
American Express (AXP)
Market Cap: $218.5 billion
Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE: AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.
Why Do We Love AXP?
- Impressive 16% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Share buybacks propelled its annual earnings per share growth to 21.4%, which outperformed its revenue gains over the last five years
- Industry-leading 33% return on equity demonstrates management’s skill in finding high-return investments
American Express is trading at $319.40 per share, or 18.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI 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%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. 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 (+1,326% between June 2020 and June 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.
