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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. Keeping that in mind, here is one S&P 500 stock that is positioned to outperform and two that could be in trouble.
Two Stocks to Sell:
AT&T (T)
Market Cap: $170.4 billion
Founded by Alexander Graham Bell, AT&T (NYSE: T) is a multinational telecomm conglomerate providing a range of communications and internet services.
Why Are We Bearish on T?
- Sales were flat over the last five years, indicating it’s failed to expand its business
- Earnings per share fell by 6.9% annually over the last five years while its revenue was flat, showing each sale was less profitable
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
AT&T is trading at $23.24 per share, or 10.2x forward P/E. Check out our free in-depth research report to learn more about why T doesn’t pass our bar.
Berkshire Hathaway (BRK.A)
Market Cap: $1.09 trillion
Led by legendary investor Warren Buffett since 1965, transforming it from a struggling textile manufacturer into a corporate giant, Berkshire Hathaway (NYSE: BRK.A) is a diversified holding company that owns businesses across insurance, railroads, utilities, manufacturing, retail, and services sectors.
Why Are We Cautious About BRK.A?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.2% for the last five years
- Earnings per share lagged its peers over the last two years as they only grew by 7% annually
At $766,566 per share, Berkshire Hathaway trades at 22.6x forward P/E. Read our free research report to see why you should think twice about including BRK.A in your portfolio.
One Stock to Watch:
Stryker (SYK)
Market Cap: $106.2 billion
With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE: SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions.
Why Could SYK Be a Winner?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 9.2% over the past two years
- Economies of scale give it more fixed cost leverage than its smaller competitors
- Free cash flow margin jumped by 6.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Stryker’s stock price of $276.25 implies a valuation ratio of 17.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
