Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. That said, here are two large-cap stocks whose competitive advantages create flywheel effects and one that could be stalling.
One Large-Cap Stock to Sell:
Emerson Electric (EMR)
Market Cap: $76.97 billion
Founded in 1890, Emerson Electric (NYSE:EMR) is a multinational technology and engineering company providing solutions in the industrial, commercial, and residential markets.
Why Do We Think Twice About EMR?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1.4% for the last five years
- Free cash flow margin dropped by 3 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Eroding returns on capital suggest its historical profit centers are aging
At $137.22 per share, Emerson Electric trades at 20.9x forward P/E. Read our free research report to see why you should think twice about including EMR in your portfolio.
Two Large-Cap Stocks to Buy:
Sea (SE)
Market Cap: $73.54 billion
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE:SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Why Will SE Outperform?
- Has the opportunity to boost monetization through new features and premium offerings as its paying users have grown by 21.9% annually over the last two years
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 42.6% annually, topping its revenue gains
- Free cash flow margin increased by 36.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Sea is trading at $124.09 per share, or 21x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
HEICO (HEI)
Market Cap: $37.26 billion
Founded in 1957, HEICO (NYSE:HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.
Why Are We Bullish on HEI?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 9.5% over the past two years
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 26.2% annually
- Strong free cash flow margin of 17.5% enables it to reinvest or return capital consistently
HEICO’s stock price of $307.89 implies a valuation ratio of 59x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
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 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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