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.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here are two S&P 500 stocks leading the market forward and one that may struggle.
One Stock to Sell:
News Corp (NWSA)
Market Cap: $15.99 billion
Established in 2013 after a restructuring, News Corp (NASDAQ:NWSA) is a multinational conglomerate known for its news publishing, broadcasting, digital media, and book publishing.
Why Do We Think NWSA Will Underperform?
- Products and services fail to spark excitement with consumers, as seen in its flat sales over the last five years
- Low free cash flow margin of 7.9% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Returns on capital haven’t budged, indicating management couldn’t drive additional value creation
News Corp is trading at $28.69 per share, or 21.5x forward P/E. Read our free research report to see why you should think twice about including NWSA in your portfolio.
Two Stocks to Watch:
Western Digital (WDC)
Market Cap: $149.7 billion
Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.
Why Could WDC Be a Winner?
- Sales outlook for the upcoming 12 months calls for 48.5% growth, an acceleration from its two-year trend
- Operating margin expansion of 21.7 percentage points over the last five years shows the company optimized its expenses
- Free cash flow margin grew by 23.1 percentage points over the last five years, giving the company more chips to play with
Western Digital’s stock price of $415.42 implies a valuation ratio of 22.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Ares (ARES)
Market Cap: $26.74 billion
With roots in the leveraged finance group of Apollo Management, Ares Management (NYSE:ARES) is an alternative investment firm that manages private equity, credit, real estate, and infrastructure assets for institutional and high-net-worth clients.
Why Is ARES a Good Business?
- Annual revenue growth of 24.3% over the last two years was superb and indicates its market share increased during this cycle
- Fee-related earnings improved by 30.3% annually over the last five years as it eliminated redundant costs
- Earnings growth has easily exceeded the peer group average over the last five years as its EPS has compounded at 19.5% annually
At $117.58 per share, Ares trades at 18.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.