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. Keeping that in mind, here are two S&P 500 stocks that could deliver good returns and one that could be in trouble.
One Stock to Sell:
Tapestry (TPR)
Market Cap: $31.32 billion
Originally founded as Coach, Tapestry (NYSE:TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Why Should You Dump TPR?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Operating margin of 13.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Tapestry’s stock price of $155.35 implies a valuation ratio of 22.4x forward P/E. Read our free research report to see why you should think twice about including TPR in your portfolio.
Two Stocks to Watch:
KLA Corporation (KLAC)
Market Cap: $193.9 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 Should You Buy KLAC?
- Annual revenue growth of 16% over the past five years was outstanding, reflecting market share gains this cycle
- Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 60.7%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
At $1,478 per share, KLA Corporation trades at 34.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Booking (BKNG)
Market Cap: $139 billion
Formerly known as The Priceline Group, Booking Holdings (NASDAQ:BKNG) is the world’s largest online travel agency.
Why Do We Like BKNG?
- Prominent and differentiated platform results in a best-in-class gross margin of 85.9%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 34.1% exceeded its revenue gains over the last three years
- Strong free cash flow margin of 34.3% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business
Booking is trading at $4,305 per share, or 13x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.