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. That said, here are three S&P 500 stocks to avoid and some better alternatives instead.

Charter (CHTR)

Market Cap: $36.33 billion

Operating as Spectrum, Charter (NASDAQ: CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.

Why Are We Cautious About CHTR?

1. Performance surrounding its internet subscribers has lagged its peers
2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
3. ROIC of 9.8% reflects management’s challenges in identifying attractive investment opportunities

Charter is trading at $266.38 per share, or 6.4x forward P/E. Dive into our free research report to see why there are better opportunities than CHTR.

LKQ (LKQ)

Market Cap: $7.71 billion

A global distributor of vehicle parts and accessories, LKQ (NASDAQ: LKQ) offers its customers a comprehensive selection of high-quality, affordably priced automobile products.

Why Do We Think LKQ Will Underperform?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Estimated sales growth of 1.2% for the next 12 months implies demand will slow from its two-year trend
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

LKQ’s stock price of $29.78 implies a valuation ratio of 8x forward P/E. To fully understand why you should be careful with LKQ, check out our full research report (it’s free).

Old Dominion Freight Line (ODFL)

Market Cap: $31.1 billion

With its name deriving from the Commonwealth of Virginia’s nickname, Old Dominion (NASDAQ: ODFL) delivers less-than-truckload (LTL) and full-container load freight.

Why Does ODFL Give Us Pause?

1. Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Waning returns on capital imply its previous profit engines are losing steam

At $147.80 per share, Old Dominion Freight Line trades at 27.2x forward P/E. Check out our free in-depth research report to learn more about why ODFL doesn’t pass our bar.

Stocks We Like More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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.

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