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. Keeping that in mind, here is one S&P 500 stock that is positioned to outperform and two best left off your watchlist.
Two Stocks to Sell:
Gilead Sciences (GILD)
Market Cap: $181.8 billion
From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ: GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer.
Why Are We Hesitant About GILD?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.7% over the last five years was below our standards for the healthcare sector
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 34.2 percentage points
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
Gilead Sciences is trading at $146.16 per share, or 16.5x forward P/E. If you’re considering GILD for your portfolio, see our FREE research report to learn more.
Martin Marietta Materials (MLM)
Market Cap: $36.36 billion
Operating one of North America's largest networks of quarries, including 14 underground mines, Martin Marietta Materials (NYSE: MLM) is a natural resource-based building materials company that supplies aggregates, cement, and other construction materials for infrastructure and building projects.
Why Is MLM Not Exciting?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Flat earnings per share over the last two years lagged its peers
- Underwhelming 8.1% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
At $513.64 per share, Martin Marietta Materials trades at 26.2x forward P/E. Dive into our free research report to see why there are better opportunities than MLM.
One Stock to Buy:
Trane Technologies (TT)
Market Cap: $98.13 billion
With low-pressure heating systems as its first product, Trane (NYSE: TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
Why Will TT Outperform?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 10.4% annual sales growth over the last five years
- Share repurchases over the last five years enabled its annual earnings per share growth of 19.2% to outpace its revenue gains
- Free cash flow margin jumped by 10.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Trane Technologies’s stock price of $446.24 implies a valuation ratio of 27.1x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
