1 S&P 500 Stock to Consider Right Now and 2 Facing Headwinds

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.

Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. 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:

Clorox (CLX)

Market Cap: $15.05 billion

Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.

Why Are We Hesitant About CLX?

1. Products fail to spark excitement with consumers, as seen in its flat sales over the last three years
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Estimated sales decline of 8.3% for the next 12 months implies an even more challenging demand environment

Clorox is trading at $123.15 per share, or 19.4x forward P/E. Dive into our free research report to see why there are better opportunities than CLX.

Norwegian Cruise Line (NCLH)

Market Cap: $11.49 billion

With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE:NCLH) is a premier global cruise company.

Why Are We Cautious About NCLH?

1. Number of passenger cruise days has disappointed over the past two years, indicating weak demand for its offerings
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders

Norwegian Cruise Line’s stock price of $25.25 implies a valuation ratio of 11.3x forward P/E. Read our free research report to see why you should think twice about including NCLH in your portfolio.

One Stock to Watch:

Centene (CNC)

Market Cap: $17.02 billion

Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE:CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations.

Why Are We Fans of CNC?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 14.2% annual sales growth over the last five years
2. Massive revenue base of $178.2 billion gives it meaningful leverage when negotiating reimbursement rates
3. Rising returns on capital show the company is starting to reap the benefits of its past investments

At $34.67 per share, Centene trades at 9.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

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