Large-cap stocks are known for their staying power and ability to weather market storms better than smaller competitors. However, their sheer size makes it more challenging to maintain high growth rates as they’ve already captured significant portions of their markets.
This is precisely where StockStory comes in - our job is to find you high-quality companies that can win regardless of the conditions. Keeping that in mind, here is one large-cap stock that still has big upside potential and two whose momentum may slow.
Two Large-Cap Stocks to Sell:
Rockwell Automation (ROK)
Market Cap: $30.57 billion
One of the first companies to address industrial automation, Rockwell Automation (NYSE:ROK) sells products that help customers extract more efficiency from their machinery.
Why Should You Sell ROK?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- 6.3 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Diminishing returns on capital suggest its earlier profit pools are drying up
Rockwell Automation’s stock price of $270.94 implies a valuation ratio of 27.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ROK.
Ford (F)
Market Cap: $39.48 billion
Established to make automobiles accessible to a broader segment of the population, Ford (NYSE:F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.
Why Are We Out on F?
- Underwhelming vehicles sold over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Free cash flow margin shrank by 10.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- High net-debt-to-EBITDA ratio of 7× could force the company to raise capital at unfavorable terms if market conditions deteriorate
At $10.00 per share, Ford trades at 6x forward price-to-earnings. Check out our free in-depth research report to learn more about why F doesn’t pass our bar.
One Large-Cap Stock to Watch:
Roblox (RBLX)
Market Cap: $35.88 billion
Best known for its wide assortment of user-generated content, Roblox (NYSE:RBLX) is an online gaming platform and game creation system.
Why Is RBLX on Our Radar?
- Daily Active Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Projected revenue growth of 19.8% for the next 12 months suggests its momentum from the last three years will persist
- Brand halo makes it a customer acquisition machine that onboards new users at scale without spending much money
Roblox is trading at $53.70 per share, or 34.6x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market - and we’re zeroing in on the stocks that could benefit immensely.
Take advantage of the rebound by checking 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 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
