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:
Workday (WDAY)
Market Cap: $63.52 billion
Founded by industry veterans Aneel Bushri and Dave Duffield after their former company PeopleSoft was acquired by Oracle in a hostile takeover, Workday (NASDAQ: WDAY) provides cloud-based software for organizations to manage and plan finance and human resources.
Why Are We Hesitant About WDAY?
- 18% annual revenue growth over the last three years was slower than its software peers
Workday is trading at $235.99 per share, or 6.8x forward price-to-sales. To fully understand why you should be careful with WDAY, check out our full research report (it’s free).
Two Large-Cap Stocks to Watch:
Ross Stores (ROST)
Market Cap: $41.38 billion
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ: ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Does ROST Stand Out?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth averaged 3.6% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Strong free cash flow margin of 8.2% enables it to reinvest or return capital consistently
Ross Stores’s stock price of $125.27 implies a valuation ratio of 18.7x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.
Altria (MO)
Market Cap: $98.31 billion
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Are We Fans of MO?
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 69.9%
- Healthy operating margin of 55.7% shows it’s a well-run company with efficient processes
- Robust free cash flow margin of 43.2% gives it many options for capital deployment
At $58.44 per share, Altria trades at 10.8x forward price-to-earnings. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
With rates dropping, inflation stabilizing, and the elections in the rearview mirror, all signs point to the start of a new bull run - and we’re laser-focused on finding the best stocks for this upcoming cycle.
Put yourself in the driver’s seat 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.
