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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here is one S&P 500 stock that could deliver good returns and two that could be in trouble.
Two Stocks to Sell:
NXP Semiconductors (NXPI)
Market Cap: $57.45 billion
Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.
Why Does NXPI Fall Short?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Projected sales growth of 15.4% for the next 12 months suggests sluggish demand
NXP Semiconductors’s stock price of $226.82 implies a valuation ratio of 13.6x forward P/E. Dive into our free research report to see why there are better opportunities than NXPI.
Huntington Ingalls (HII)
Market Cap: $11.27 billion
Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.
Why Do We Avoid HII?
- The company has faced growth challenges as its 5.8% annual revenue increases over the last two years fell short of other industrials companies
- Earnings per share fell by 1.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.7 percentage points
Huntington Ingalls is trading at $290.65 per share, or 14.8x forward P/E. Check out our free in-depth research report to learn more about why HII doesn’t pass our bar.
One Stock to Buy:
Arthur J. Gallagher (AJG)
Market Cap: $67.34 billion
Founded in 1927 and operating in approximately 130 countries through direct operations and correspondent networks, Arthur J. Gallagher (NYSE: AJG) provides insurance brokerage, reinsurance, consulting, and third-party claims settlement services to businesses and individuals worldwide.
Why Is AJG a Top Pick?
- Annual revenue growth of 20% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 18.5% annually over the last five years and trumped its peers
- Strong free cash flow margin of 17.3% enables it to reinvest or return capital consistently
At $266.79 per share, Arthur J. Gallagher trades at 18.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
