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 positioned to outperform and two that could be in trouble.
Two Stocks to Sell:
Rockwell Automation (ROK)
Market Cap: $46.98 billion
One of the first companies to address industrial automation, Rockwell Automation (NYSE:ROK) sells products that help customers extract more efficiency from their machinery.
Why Does ROK Give Us Pause?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Eroding returns on capital suggest its historical profit centers are aging
Rockwell Automation’s stock price of $417.13 implies a valuation ratio of 35.3x forward P/E. To fully understand why you should be careful with ROK, check out our full research report (it’s free).
FedEx (FDX)
Market Cap: $71.53 billion
Sporting one of the largest air cargo fleets in the world, FedEx (NYSE:FDX) is a global provider of parcel and cargo delivery services.
Why Do We Pass on FDX?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.2% over the last two years was below our standards for the industrials sector
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
FedEx is trading at $303.59 per share, or 15.9x forward P/E. If you’re considering FDX for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Erie Indemnity (ERIE)
Market Cap: $14.42 billion
Operating under a unique business model dating back to 1925, Erie Indemnity (NASDAQ:ERIE) serves as the attorney-in-fact for Erie Insurance Exchange, managing policy issuance, claims handling, and investment services for this reciprocal insurer.
Why Should You Buy ERIE?
- Market share has increased this cycle as its 13.2% annual revenue growth over the last two years was exceptional
- Annual book value per share growth of 13.1% over the last five years was superb and indicates its capital strength increased during this cycle
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $275.78 per share, Erie Indemnity trades at 20.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.