Large-cap stocks usually command their industries because they have the scale to drive market trends. The flip side though is that their sheer size can limit growth as expanding further becomes an increasingly challenging task.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. That said, here is one large-cap stock with attractive long-term potential and two that could be stalling.
Two Large-Cap Stocks to Sell:
Workday (WDAY)
Market Cap: $64.05 billion
Founded by industry veterans Aneel Bushri and Dave Duffield after their former company PeopleSoft was acquired by Oracle in a hostile takeover, Workday (NASDAQ: WDAY) provides cloud-based software for organizations to manage and plan finance and human resources.
Why Is WDAY Not Exciting?
- 17.2% annual revenue growth over the last three years was slower than its software peers
Workday is trading at $241.47 per share, or 6.6x forward price-to-sales. To fully understand why you should be careful with WDAY, check out our full research report (it’s free).
Cummins (CMI)
Market Cap: $44.5 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 Are We Cautious About CMI?
- Sizable revenue base leads to growth challenges as its 6% annual revenue increases over the last two years fell short of other industrials companies
- Free cash flow margin dropped by 10.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Cummins’s stock price of $330.24 implies a valuation ratio of 11.1x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why CMI doesn’t pass our bar.
One Large-Cap Stock to Watch:
Altria (MO)
Market Cap: $100.2 billion
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Does MO Stand Out?
- Products command premium prices and lead to a best-in-class gross margin of 70.2%
- Excellent operating margin of 53.6% highlights the efficiency of its business model
- Robust free cash flow margin of 42.9% gives it many options for capital deployment
At $59.39 per share, Altria trades at 11.2x 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
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
