1 S&P 500 Stock with Impressive Fundamentals and 2 Facing Challenges

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.

Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. 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:

Walmart (WMT)

Market Cap: $1.07 trillion

Known for its large-format Supercenters, Walmart (NYSE:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.

Why Are We Hesitant About WMT?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 5.4% for the last three years
2. Gross margin of 24.8% is below its competitors, leaving less money for marketing and promotions
3. Poor expense management has led to an operating margin of 4.2% that is below the industry average

Walmart is trading at $133.88 per share, or 46.6x forward P/E. Check out our free in-depth research report to learn more about why WMT doesn’t pass our bar.

IDEX (IEX)

Market Cap: $15.75 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 Do We Avoid IEX?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 1.7% annually while its revenue grew
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $210.43 per share, IDEX trades at 24.8x forward P/E. If you’re considering IEX for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

O'Reilly (ORLY)

Market Cap: $81.38 billion

Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ:ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.

Why Is ORLY a Top Pick?

1. Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.8% over the past two years
2. Highly efficient business model is illustrated by its impressive 19.5% operating margin
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

O'Reilly’s stock price of $95.60 implies a valuation ratio of 29.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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.