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. That said, here is one S&P 500 stock that is leading the market forward and two that may struggle.
Two Stocks to Sell:
Hologic (HOLX)
Market Cap: $16.76 billion
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ: HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Why Does HOLX Fall Short?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Free cash flow margin shrank by 20.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital imply its previous profit engines are losing steam
At $75.22 per share, Hologic trades at 16.5x forward P/E. To fully understand why you should be careful with HOLX, check out our full research report (it’s free for active Edge members).
West Pharmaceutical Services (WST)
Market Cap: $19.56 billion
Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE: WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.
Why Is WST Not Exciting?
- Annual revenue growth of 1.5% over the last two years was below our standards for the healthcare sector
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 5.5 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
West Pharmaceutical Services is trading at $271.95 per share, or 35.9x forward P/E. Dive into our free research report to see why there are better opportunities than WST.
One Stock to Watch:
McDonald's (MCD)
Market Cap: $227 billion
With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE: MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
Why Is MCD Interesting?
- Rapidly increasing restaurant base reflects a desire to sell in new markets and scale quickly
- Attractive franchise model leads to wonderful unit economics and a best-in-class gross margin of 57%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
McDonald’s stock price of $319.03 implies a valuation ratio of 24.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
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 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
