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.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. That said, here are three S&P 500 stocks to steer clear of and a few alternatives to consider.
J. M. Smucker (SJM)
Market Cap: $11.53 billion
Best known for its fruit jams and spreads, J.M Smucker (NYSE: SJM) is a packaged foods company whose products span from peanut butter and coffee to pet food.
Why Should You Dump SJM?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 27.1 percentage points
- ROIC of 2.2% reflects management’s challenges in identifying attractive investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
At $108.08 per share, J. M. Smucker trades at 11.5x forward P/E. Read our free research report to see why you should think twice about including SJM in your portfolio.
Expeditors (EXPD)
Market Cap: $16.22 billion
Expeditors (NYSE: EXPD) offers air and ocean freight as well as brokerage services.
Why Are We Out on EXPD?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.5% annually over the last two years
- Earnings per share have dipped by 4.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
Expeditors’s stock price of $119.48 implies a valuation ratio of 22.7x forward P/E. Check out our free in-depth research report to learn more about why EXPD doesn’t pass our bar.
Morgan Stanley (MS)
Market Cap: $256.5 billion
Founded in 1924 during the post-WWI economic boom by former JP Morgan partners, Morgan Stanley (NYSE: MS) is a global financial services firm that provides investment banking, wealth management, and investment management services to corporations, governments, institutions, and individuals.
Why Does MS Fall Short?
- Earnings per share lagged its peers over the last five years as they only grew by 9.2% annually
- Sizable asset base leads to capital growth challenges as its 1.6% annual tangible book value per share increases over the last five years fell short of other financials companies
Morgan Stanley is trading at $160.70 per share, or 17.9x forward P/E. Dive into our free research report to see why there are better opportunities than MS.
Stocks We Like More
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 Growth Stocks for this month. 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-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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