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.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here is one S&P 500 stock that is positioned to outperform and two best left off your watchlist.
Two Stocks to Sell:
D.R. Horton (DHI)
Market Cap: $48.61 billion
One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.
Why Do We Pass on DHI?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 13.7% decline in its backlog
- Earnings per share have dipped by 11% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
D.R. Horton is trading at $166.85 per share, or 15.5x forward P/E. Dive into our free research report to see why there are better opportunities than DHI.
U.S. Bancorp (USB)
Market Cap: $89.68 billion
With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE:USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.
Why Is USB Not Exciting?
- Annual net interest income growth of 5.4% over the last five years lagged behind its banking peers as its large revenue base made it difficult to generate incremental demand
- Inferior net interest margin of 2.7% means it must compensate for lower profitability through increased loan originations
- 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 tangible book value per share increases of 3.3% for the last five years
U.S. Bancorp’s stock price of $57.68 implies a valuation ratio of 1.4x forward P/B. If you’re considering USB for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Copart (CPRT)
Market Cap: $36.29 billion
Starting as a single salvage yard in California in 1982, Copart (NASDAQ:CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.
Why Will CPRT Outperform?
- Impressive 15.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 19.3% outpaced its revenue gains
- Strong free cash flow margin of 24.2% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
At $37.70 per share, Copart trades at 22.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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.