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.
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 is one S&P 500 stock that is leading the market forward and two best left off your watchlist.
Two Stocks to Sell:
Autodesk (ADSK)
Market Cap: $49.39 billion
Starting with AutoCAD in the 1980s and evolving into a comprehensive design ecosystem, Autodesk (NASDAQ: ADSK) provides software solutions for architecture, engineering, construction, manufacturing, and entertainment industries to design, simulate, and visualize projects.
Why Are We Hesitant About ADSK?
- 13.7% annual revenue growth over the last five years was slower than its software peers
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Operating margin was unchanged over the last year, suggesting it failed to gain leverage on its fixed costs
Autodesk’s stock price of $236.75 implies a valuation ratio of 6x forward price-to-sales. Check out our free in-depth research report to learn more about why ADSK doesn’t pass our bar.
Hormel Foods (HRL)
Market Cap: $13.65 billion
Best known for its SPAM brand, Hormel (NYSE: HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Why Do We Steer Clear of HRL?
- Falling unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 16.2% that must be offset through higher volumes
- Sales over the last three years were less profitable as its earnings per share fell by 8.8% annually while its revenue was flat
Hormel Foods is trading at $24.85 per share, or 16.8x forward P/E. If you’re considering HRL for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Xylem (XYL)
Market Cap: $32.08 billion
Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.
Why Are We Positive On XYL?
- Annual revenue growth of 13.1% over the past five years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 19.8% over the last five years outstripped its revenue performance
- Free cash flow margin increased by 3.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $131.37 per share, Xylem trades at 23.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 5 Strong Momentum Stocks for this week. 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
