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.
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 is one S&P 500 stock that is leading the market forward and two best left off your watchlist.
Two Stocks to Sell:
CarMax (KMX)
Market Cap: $9.21 billion
Known for its transparent, customer-centric approach and wide selection of vehicles, Carmax (NYSE:KMX) is the largest automotive retailer in the United States.
Why Do We Think KMX Will Underperform?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Gross margin of 10.8% is below its competitors, leaving less money for marketing and promotions
- High net-debt-to-EBITDA ratio could force the company to raise capital at unfavorable terms if market conditions deteriorate
CarMax is trading at $61.89 per share, or 15.6x forward P/E. Check out our free in-depth research report to learn more about why KMX doesn’t pass our bar.
Invesco (IVZ)
Market Cap: $9.76 billion
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE:IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Is IVZ Risky?
- Sales tumbled by 2.4% annually over the last five years, showing market trends are working against its favor during this cycle
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Low return on equity reflects management’s struggle to allocate funds effectively
At $22.03 per share, Invesco trades at 11.4x forward P/E. To fully understand why you should be careful with IVZ, check out our full research report (it’s free).
One Stock to Watch:
Jack Henry (JKHY)
Market Cap: $11.9 billion
Founded in 1976 by two entrepreneurs who saw the need for specialized banking software in the early days of financial computing, Jack Henry & Associates (NASDAQ:JKHY) provides technology solutions that help banks and credit unions innovate, differentiate, and compete while serving the evolving needs of their accountholders.
Why Should JKHY Be on Your Watchlist?
- Performance over the past two years shows its incremental sales were more profitable, as its annual earnings per share growth of 11.5% outpaced its revenue gains
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Jack Henry’s stock price of $163.26 implies a valuation ratio of 25.8x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
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