2 S&P 500 Stocks with Promising Prospects and 1 We Ignore

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.

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 two S&P 500 stocks positioned to outperform and one best left off your watchlist.

One Stock to Sell:

Snap-on (SNA)

Market Cap: $18.25 billion

Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.

Why Are We Cautious About SNA?

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. Flat earnings per share over the last two years underperformed the sector average
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $350.95 per share, Snap-on trades at 17.4x forward P/E. Check out our free in-depth research report to learn more about why SNA doesn’t pass our bar.

Two Stocks to Watch:

Carvana (CVNA)

Market Cap: $56.6 billion

Known for its glass tower car vending machines, Carvana (NYSE:CVNA) provides a convenient automotive shopping experience by offering an online platform for buying and selling used cars.

Why Is CVNA on Our Radar?

1. Retail Units Sold have increased by an average of 31.4% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
2. Incremental sales over the last three years have been highly profitable as its earnings per share increased by 38.5% annually, topping its revenue gains
3. Free cash flow margin grew by 19.3 percentage points over the last few years, giving the company more chips to play with

Carvana’s stock price of $400.73 implies a valuation ratio of 24x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

Raymond James (RJF)

Market Cap: $32.18 billion

Founded in 1962 and headquartered in St. Petersburg, Florida, Raymond James Financial (NYSE:RJF) is a diversified financial services company that provides wealth management, investment banking, asset management, and banking services to individuals and institutions.

Why Do We Love RJF?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 12% annual sales growth over the last five years
2. Share buybacks propelled its annual earnings per share growth to 21.2%, which outperformed its revenue gains over the last five years
3. Balance sheet strength has increased this cycle as its 14.4% annual tangible book value per share growth over the last two years was exceptional

Raymond James is trading at $163.60 per share, or 13.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

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 9 Market-Beating Stocks. 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-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.