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. Keeping that in mind, here are three S&P 500 stocks to steer clear of and a few alternatives to consider.
Builders FirstSource (BLDR)
Market Cap: $13.81 billion
Headquartered in Irving, TX, Builders FirstSource (NYSE:BLDR) is a construction materials manufacturer that offers a variety of lumber and lumber-related building products.
Why Is BLDR Not Exciting?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.9% annually over the last two years
- Earnings per share have dipped by 24.8% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
Builders FirstSource is trading at $124.91 per share, or 20.4x forward P/E. If you’re considering BLDR for your portfolio, see our FREE research report to learn more.
AMETEK (AME)
Market Cap: $48.74 billion
Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.
Why Does AME Give Us Pause?
- Annual revenue growth of 5.1% over the last two years was below our standards for the industrials sector
- 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
At $211.74 per share, AMETEK trades at 26.8x forward P/E. Dive into our free research report to see why there are better opportunities than AME.
Bristol-Myers Squibb (BMY)
Market Cap: $113.8 billion
With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE:BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.
Why Does BMY Worry Us?
- Sizable revenue base leads to growth challenges as its 3.9% annual revenue increases over the last two years fell short of other healthcare companies
- Estimated sales decline of 6.3% for the next 12 months implies a challenging demand environment
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Bristol-Myers Squibb’s stock price of $55.94 implies a valuation ratio of 9.1x forward P/E. Check out our free in-depth research report to learn more about why BMY doesn’t pass our bar.
High-Quality Stocks for All Market Conditions
Check out the high-quality names we’ve flagged in 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.