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. Keeping that in mind, here is one S&P 500 stock that is leading the market forward and two that could be in trouble.
Two Stocks to Sell:
Constellation Brands (STZ)
Market Cap: $26.03 billion
With a presence in more than 100 countries, Constellation Brands (NYSE:STZ) is a globally renowned producer and marketer of beer, wine, and spirits.
Why Are We Hesitant About STZ?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Projected sales decline of 6.2% for the next 12 months points to an even tougher demand environment ahead
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging
At $149.18 per share, Constellation Brands trades at 12.5x forward P/E. If you’re considering STZ for your portfolio, see our FREE research report to learn more.
Quest (DGX)
Market Cap: $20.2 billion
Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE:DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.
Why Are We Wary of DGX?
- 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 5.3% for the last five years
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 9.7 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
Quest is trading at $182.07 per share, or 17.6x forward P/E. Dive into our free research report to see why there are better opportunities than DGX.
One Stock to Watch:
Intuitive Surgical (ISRG)
Market Cap: $194 billion
Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ:ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties.
Why Does ISRG Catch Our Eye?
- Products are reaching more customers as its system placement averaged 12.7% growth over the past two years
- Projected revenue growth of 14.2% for the next 12 months suggests its momentum from the last two years will persist
- Earnings per share grew by 20.9% annually over the last five years and trumped its peers
Intuitive Surgical’s stock price of $549.35 implies a valuation ratio of 60.1x 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.
High-Quality Stocks for All Market Conditions
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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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