3 S&P 500 Stocks That Concern Us

via StockStory
ⓘ This article is third-party content and does not represent the views of this site. We make no guarantees regarding its accuracy or completeness.

ON Cover Image

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.

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 three S&P 500 stocks to avoid and some better alternatives instead.

onsemi (ON)

Market Cap: $28.47 billion

Spun out of Motorola in 1999 and built through a series of acquisitions, onsemi (NASDAQ:ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers.

Why Do We Pass on ON?

  1. Annual sales declines of 10.8% for the past two years show its products and services struggled to connect with the market during this cycle
  2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 12.8%
  3. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 16.9 percentage points

onsemi is trading at $73.29 per share, or 18.5x forward P/E. Dive into our free research report to see why there are better opportunities than ON.

Cummins (CMI)

Market Cap: $71.88 billion

With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems.

Why Does CMI Worry Us?

  1. Sales stagnated over the last two years and signal the need for new growth strategies
  2. Gross margin of 24.8% reflects its high production costs
  3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

At $527.70 per share, Cummins trades at 16.2x forward P/E. Check out our free in-depth research report to learn more about why CMI doesn’t pass our bar.

Delta (DAL)

Market Cap: $48.83 billion

One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE:DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Why Do We Think DAL Will Underperform?

  1. Number of revenue passenger miles has disappointed over the past two years, indicating weak demand for its offerings
  2. Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
  3. Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Delta’s stock price of $74.73 implies a valuation ratio of 11.4x forward P/E. If you’re considering DAL for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Report this content

If you believe this article contains misleading, harmful, or spam content, please let us know.

Report this article