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:
Texas Instruments (TXN)
Market Cap: $167.9 billion
Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.
Why Are We Hesitant About TXN?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 11.6% annually over the last two years
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 5.8 percentage points
- Free cash flow margin dropped by 28.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
At $184.28 per share, Texas Instruments trades at 30.8x forward price-to-earnings. To fully understand why you should be careful with TXN, check out our full research report (it’s free).
Charter (CHTR)
Market Cap: $54.63 billion
Operating as Spectrum, Charter (NASDAQ: CHTR) is a leading telecommunications company offering cable television, high-speed internet, and voice services across the United States.
Why Should You Dump CHTR?
- Demand for its offerings was relatively low as its number of internet subscribers has underwhelmed
- Sales are projected to be flat over the next 12 months and imply weak demand
- Underwhelming 9.5% return on capital reflects management’s difficulties in finding profitable growth opportunities
Charter is trading at $385.29 per share, or 10.9x forward price-to-earnings. Read our free research report to see why you should think twice about including CHTR in your portfolio.
One Large-Cap Stock to Buy:
The Trade Desk (TTD)
Market Cap: $29.17 billion
Founded by former Microsoft engineers Jeff Green and Dave Pickles, The Trade Desk (NASDAQ: TTD) offers cloud-based software that uses data to help advertisers better plan, place, and target their online ads.
Why Are We Backing TTD?
- Billings growth has averaged 27.1% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Healthy operating margin of 17.5% shows it’s a well-run company with efficient processes, and its rise over the last year was fueled by some leverage on its fixed costs
The Trade Desk’s stock price of $58.43 implies a valuation ratio of 10.3x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out our Top 5 Growth Stocks for this month. 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.
