The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here is one S&P 500 stock that could deliver good returns and two best left off your watchlist.
Two Stocks to Sell:
Dayforce (DAY)
Market Cap: $11.06 billion
Rebranded from Ceridian in January 2024 to highlight its flagship product, Dayforce (NYSE: DAY) provides cloud-based software that helps organizations manage their entire employee lifecycle, including HR, payroll, workforce management, benefits, and talent development.
Why Are We Wary of DAY?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 12% underwhelmed
- Sky-high servicing costs result in an inferior gross margin of 50.9% that must be offset through increased usage
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
Dayforce is trading at $69.11 per share, or 5.2x forward price-to-sales. To fully understand why you should be careful with DAY, check out our full research report (it’s free for active Edge members).
FactSet (FDS)
Market Cap: $10.44 billion
Founded in 1978 when financial data was still primarily delivered through paper reports, FactSet (NYSE: FDS) provides financial data, analytics, and technology solutions that investment professionals use to research, analyze, and manage their portfolios.
Why Are We Hesitant About FDS?
- 5.5% annual revenue growth over the last two years was slower than its financials peers
- Earnings per share lagged its peers over the last two years as they only grew by 8.1% annually
FactSet’s stock price of $278.93 implies a valuation ratio of 16.1x forward P/E. If you’re considering FDS for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Intuit (INTU)
Market Cap: $184.5 billion
Originally named after its founding product "Intuitive for the first-time user," Intuit (NASDAQ: INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.
Why Does INTU Stand Out?
- Billings growth has averaged 17.8% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 26.7%, and its profits increased over the last year as it scaled
- Robust free cash flow margin of 32.7% gives it many options for capital deployment
At $663.34 per share, Intuit trades at 8.4x forward price-to-sales. 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
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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
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