Large-cap stocks usually command their industries because they have the scale to drive market trends. The flip side though is that their sheer size can limit growth as expanding further becomes an increasingly challenging task.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. Keeping that in mind, here are two large-cap stocks with attractive long-term potential and one whose momentum may slow.
One Large-Cap Stock to Sell:
CVS Health (CVS)
Market Cap: $102 billion
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Why Are We Wary of CVS?
- Sizable revenue base leads to growth challenges as its 6.4% annual revenue increases over the last two years fell short of other healthcare companies
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.9% annually while its revenue grew
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging
CVS Health’s stock price of $80.42 implies a valuation ratio of 11.6x forward P/E. To fully understand why you should be careful with CVS, check out our full research report (it’s free for active Edge members).
Two Large-Cap Stocks to Watch:
Cadence Design Systems (CDNS)
Market Cap: $84.88 billion
Powering the chips behind everything from smartphones to AI accelerators for over 35 years, Cadence Design Systems (NASDAQ: CDNS) provides essential computational software, hardware, and intellectual property used by engineers to design and verify advanced electronic systems and semiconductors.
Why Do We Like CDNS?
- Average billings growth of 21.8% over the last year enhances its liquidity and shows there is steady demand for its products
- Superior software functionality and low servicing costs result in a best-in-class gross margin of 86.6%
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
At $310.17 per share, Cadence Design Systems trades at 14.8x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Waste Management (WM)
Market Cap: $87.77 billion
Headquartered in Houston, Waste Management (NYSE: WM) is a provider of comprehensive waste management services in North America.
Why Could WM Be a Winner?
- Impressive 10.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Offerings are difficult to replicate at scale and result in a premier gross margin of 38.7%
- Excellent operating margin of 17.2% highlights the efficiency of its business model
Waste Management is trading at $217.78 per share, or 27x forward P/E. Is now the time to initiate a position? 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 5 Growth Stocks for this month. 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 Exlservice (+354% 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
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