The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here is one S&P 500 stock that is positioned to outperform and two that could be in trouble.
Two Stocks to Sell:
Cincinnati Financial (CINF)
Market Cap: $26.03 billion
Founded in 1950 by independent insurance agents seeking stable market options for their clients, Cincinnati Financial (NASDAQ: CINF) provides property casualty insurance, life insurance, and related financial services through independent agencies across 46 states.
Why Is CINF Not Exciting?
- Costs have risen faster than its revenue over the last five years, causing its pre-tax profit margin to decline by 26.9 percentage points
- Scale is a double-edged sword because it limits the firm’s capital growth potential compared to its smaller competitors, as reflected in its below-average annual book value per share increases of 12.1% for the last two years
- Estimated book value per share growth of 5.8% for the next 12 months implies profitability will slow from its two-year trend
At $170.21 per share, Cincinnati Financial trades at 1.6x forward P/B. Check out our free in-depth research report to learn more about why CINF doesn’t pass our bar.
Archer-Daniels-Midland (ADM)
Market Cap: $38.03 billion
Transforming crops from the world's most productive agricultural regions into everyday essentials, Archer-Daniels-Midland (NYSE: ADM) processes and transports agricultural commodities like grains and oilseeds while manufacturing ingredients for food, beverages, feed, and industrial applications.
Why Are We Wary of ADM?
- Products have few die-hard fans as sales have declined by 7.5% annually over the last three years
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 6.3% that must be offset through higher volumes
- Earnings per share have dipped by 24.7% annually over the past three years, which is concerning because stock prices follow EPS over the long term
Archer-Daniels-Midland’s stock price of $75.36 implies a valuation ratio of 14.4x forward P/E. Read our free research report to see why you should think twice about including ADM in your portfolio.
One Stock to Watch:
Intuitive Surgical (ISRG)
Market Cap: $146.2 billion
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ: ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Why Does ISRG Catch Our Eye?
- Market share has increased this cycle as its 20.2% annual revenue growth over the last two years was exceptional
- Share repurchases over the last five years enabled its annual earnings per share growth of 21.3% to outpace its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
Intuitive Surgical is trading at $408.13 per share, or 37.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.
