The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
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 are three S&P 500 stocks to avoid and some better alternatives instead.
Tapestry (TPR)
Market Cap: $25.01 billion
Originally founded as Coach, Tapestry (NYSE: TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Why Do We Steer Clear of TPR?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Subpar operating margin of 11.8% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
At $122.19 per share, Tapestry trades at 22x forward P/E. Read our free research report to see why you should think twice about including TPR in your portfolio.
Hartford (HIG)
Market Cap: $38.55 billion
Recognizable by its iconic stag logo that dates back to 1810, The Hartford (NYSE: HIG) provides property and casualty insurance, group benefits, and investment products to individuals and businesses across the United States.
Why Are We Cautious About HIG?
- Outsized scale creates growth headwinds as its 6.1% annualized net premiums earned increases over the last five years underperformed other financial institutions
- Projected sales decline of 22.5% for the next 12 months points to a tough demand environment ahead
- Annual book value per share growth of 5.8% over the last five years lagged behind its insurance peers as its large balance sheet made it difficult to generate incremental capital growth
Hartford’s stock price of $138.67 implies a valuation ratio of 2.1x forward P/B. Dive into our free research report to see why there are better opportunities than HIG.
JPMorgan Chase (JPM)
Market Cap: $857.5 billion
Tracing its roots back to 1799 when its earliest predecessor was founded by Aaron Burr, JPMorgan Chase (NYSE: JPM) is a leading financial services company offering investment banking, consumer banking, commercial banking, and asset management services globally.
Why Are We Wary of JPM?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 7.5% over the last two years was below our standards for the banking sector
- Weak unit economics are reflected in its net interest margin of 2.6%, one of the worst among bank companies
- Estimated tangible book value per share growth of 7.1% for the next 12 months implies profitability will slow from its two-year trend
JPMorgan Chase is trading at $315.28 per share, or 2.5x forward P/B. To fully understand why you should be careful with JPM, check out our full research report (it’s free for active Edge members).
Stocks We Like 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 6 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.
