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 is one S&P 500 stock that is leading the market forward and two that could be in trouble.
Two Stocks to Sell:
Analog Devices (ADI)
Market Cap: $115.6 billion
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Why Does ADI Fall Short?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 10.1% annually over the last two years
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging
Analog Devices is trading at $234.99 per share, or 26x forward P/E. Dive into our free research report to see why there are better opportunities than ADI.
Church & Dwight (CHD)
Market Cap: $20.19 billion
Best known for its Arm & Hammer baking soda, Church & Dwight (NYSE: CHD) is a household and personal care products company with a vast portfolio that spans laundry detergent to toothbrushes to hair removal creams.
Why Does CHD Worry Us?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Anticipated sales growth of 4.1% for the next year implies demand will be shaky
- Earnings growth underperformed the sector average over the last three years as its EPS grew by just 4.7% annually
At $84.20 per share, Church & Dwight trades at 23x forward P/E. If you’re considering CHD for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
KLA Corporation (KLAC)
Market Cap: $149 billion
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Why Do We Love KLAC?
- Market share has increased this cycle as its 16.1% annual revenue growth over the last five years was exceptional
- Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 60.6%
- Robust free cash flow margin of 30.8% gives it many options for capital deployment
KLA Corporation’s stock price of $1,139 implies a valuation ratio of 31.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum 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 Kadant (+351% 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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