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. That said, here is one S&P 500 stock that is leading the market forward and two that could be in trouble.
Two Stocks to Sell:
NXP Semiconductors (NXPI)
Market Cap: $54.01 billion
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
Why Are We Cautious About NXPI?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 3.9% annually over the last two years
- Anticipated sales growth of 10.6% for the next year implies demand will be shaky
NXP Semiconductors is trading at $210.03 per share, or 15x forward P/E. Check out our free in-depth research report to learn more about why NXPI doesn’t pass our bar.
CBRE (CBRE)
Market Cap: $42.65 billion
Established in 1906, CBRE (NYSE: CBRE) is one of the largest commercial real estate services firms in the world.
Why Is CBRE Risky?
- Annual sales growth of 11.2% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
- Free cash flow margin is anticipated to expand by 1 percentage points over the next year, providing additional flexibility for investments and share buybacks/dividends
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $147.83 per share, CBRE trades at 19.6x forward P/E. To fully understand why you should be careful with CBRE, check out our full research report (it’s free).
One Stock to Buy:
ADP (ADP)
Market Cap: $80.69 billion
Processing one out of every six paychecks in the United States, ADP (NASDAQ: ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
Why Will ADP Outperform?
- Solid 7.8% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Robust free cash flow margin of 20.7% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
- Improving returns on capital reflect management’s ability to monetize investments
ADP’s stock price of $201.65 implies a valuation ratio of 17.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
