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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here are two S&P 500 stocks positioned to outperform and one best left off your watchlist.
One Stock to Sell:
Best Buy (BBY)
Market Cap: $16.25 billion
With humble beginnings as a stereo equipment seller, Best Buy (NYSE: BBY) now sells a broad selection of consumer electronics, appliances, and home office products.
Why Do We Think BBY Will Underperform?
- Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Gross margin of 22.6% is below its competitors, leaving less money for marketing and promotions
Best Buy is trading at $78.65 per share, or 11.6x forward P/E. Check out our free in-depth research report to learn more about why BBY doesn’t pass our bar.
Two Stocks to Watch:
Omnicom Group (OMC)
Market Cap: $21.54 billion
With a vast network of creative agencies that helped craft some of the most memorable ad campaigns in history, Omnicom Group (NYSE: OMC) is a strategic holding company that provides advertising, marketing, and communications services to many of the world's largest companies.
Why Should You Buy OMC?
- Annual revenue growth of 15.4% over the past two years was outstanding, reflecting market share gains this cycle
- Enormous revenue base of $19.82 billion provides significant distribution advantages
- Free cash flow margin grew by 6.8 percentage points over the last five years, giving the company more chips to play with
Omnicom Group’s stock price of $80.82 implies a valuation ratio of 7.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Travelers (TRV)
Market Cap: $64.62 billion
Tracing its roots back to 1853 when it insured travelers against accidents on steamboats and railroads, Travelers (NYSE: TRV) provides a wide range of commercial and personal property and casualty insurance products to businesses, government units, associations, and individuals.
Why Does TRV Stand Out?
- Pre-tax profit margin improvement of 10.5 percentage points over the last two years demonstrates its ability to scale efficiently
- Share buybacks catapulted its annual earnings per share growth to 56.3%, which outperformed its revenue gains over the last two years
- Exciting book value per share outlook for the upcoming 12 months calls for 22% growth, an acceleration from its two-year trend
At $345.79 per share, Travelers trades at 2.1x forward P/B. Is now a good time to buy? Find out in our full 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.
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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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
