1 S&P 500 Stock on Our Buy List and 2 We Turn Down

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. That said, here is one S&P 500 stock that is leading the market forward and two that could be in trouble.

Two Stocks to Sell:

IDEX (IEX)

Market Cap: $12.09 billion

Founded in 1988, IDEX (NYSE:IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.

Why Should You Sell IEX?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Sales over the last two years were less profitable as its earnings per share fell by 4% annually while its revenue was flat
3. Eroding returns on capital suggest its historical profit centers are aging

IDEX is trading at $160.60 per share, or 18.8x forward P/E. If you’re considering IEX for your portfolio, see our FREE research report to learn more.

Regeneron (REGN)

Market Cap: $61.76 billion

Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ:REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.

Why Do We Think Twice About REGN?

1. Sizable revenue base leads to growth challenges as its 5.9% annual revenue increases over the last two years fell short of other healthcare companies
2. Efficiency has decreased over the last five years as its adjusted operating margin fell by 21.4 percentage points
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $598.01 per share, Regeneron trades at 16.4x forward P/E. Read our free research report to see why you should think twice about including REGN in your portfolio.

One Stock to Buy:

TransDigm (TDG)

Market Cap: $72.99 billion

Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE:TDG) develops and manufactures components and systems for military and commercial aviation.

Why Will TDG Beat the Market?

1. Core business can prosper without any help from acquisitions as its organic revenue growth averaged 13% over the past two years
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 24.9% over the last two years outstripped its revenue performance
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety

TransDigm’s stock price of $1,295 implies a valuation ratio of 30.8x forward P/E. Is now the time to initiate a position? 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 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-micro-cap company Kadant (+351% 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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