The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
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 avoid and some better alternatives instead.
Disney (DIS)
Market Cap: $202.5 billion
Founded by brothers Walt and Roy, Disney (NYSE: DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.
Why Should You Dump DIS?
- 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 3.8% for the last two years
- Projected 2.7 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- ROIC of 6.6% reflects management’s challenges in identifying attractive investment opportunities
Disney is trading at $112.96 per share, or 18.3x forward P/E. To fully understand why you should be careful with DIS, check out our full research report (it’s free for active Edge members).
C.H. Robinson Worldwide (CHRW)
Market Cap: $18.19 billion
Engaging in contracts with tens of thousands of transportation companies, C.H. Robinson (NASDAQ: CHRW) offers freight transportation and logistics services.
Why Is CHRW Not Exciting?
- Sales tumbled by 5.4% annually over the last two years, showing market trends are working against its favor during this cycle
- Gross margin of 7.4% reflects its high production costs
- Diminishing returns on capital suggest its earlier profit pools are drying up
C.H. Robinson Worldwide’s stock price of $153.91 implies a valuation ratio of 27.3x forward P/E. If you’re considering CHRW for your portfolio, see our FREE research report to learn more.
United Airlines (UAL)
Market Cap: $30.44 billion
Founded in 1926, United Airlines Holdings (NASDAQ: UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Are We Wary of UAL?
- Performance surrounding its revenue passenger miles has lagged its peers
- Low free cash flow margin of 3.5% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $94.19 per share, United Airlines trades at 7.5x forward P/E. Dive into our free research report to see why there are better opportunities than UAL.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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