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 could deliver good returns and two that could be in trouble.
Two Stocks to Sell:
Texas Instruments (TXN)
Market Cap: $145.6 billion
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Why Is TXN Not Exciting?
- Efficiency has decreased over the last five years as its operating margin fell by 13.5 percentage points
- Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
- 28.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Texas Instruments is trading at $160.65 per share, or 27.4x forward P/E. To fully understand why you should be careful with TXN, check out our full research report (it’s free for active Edge members).
Moderna (MRNA)
Market Cap: $9.65 billion
Rising to global prominence during the COVID-19 pandemic with one of the first effective vaccines, Moderna (NASDAQ: MRNA) develops messenger RNA (mRNA) medicines that direct the body's cells to produce proteins with therapeutic or preventive benefits for various diseases.
Why Should You Sell MRNA?
- Sales tumbled by 46.3% annually over the last two years, showing market trends are working against its favor during this cycle
- Free cash flow margin shrank by 242.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $24.78 per share, Moderna trades at 5.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MRNA.
One Stock to Watch:
Yum! Brands (YUM)
Market Cap: $38.63 billion
Spun off as an independent company from PepsiCo, Yum! Brands (NYSE: YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.
Why Is YUM on Our Radar?
- Aggressive expansion of new stores reflects an offensive push to quickly grow and sell in markets where it has few or no locations
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 31.9%
- YUM is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Yum! Brands’s stock price of $140.52 implies a valuation ratio of 22.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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
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