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.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. 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:
Intuit (INTU)
Market Cap: $73.7 billion
Originally named after its founding product “Intuitive for the first-time user,” Intuit (NASDAQ:INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.
Why Do We Think Twice About INTU?
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Average billings growth of 14.2% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
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Estimated sales growth of 9.1% for the next 12 months implies demand will slow from its two-year trend
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Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Intuit’s stock price of $276.01 implies a valuation ratio of 3.2x forward price-to-sales. Read our free research report to see why you should think twice about including INTU in your portfolio, it’s free.
Sysco (SYY)
Market Cap: $38.6 billion
Powering more than 730,000 commercial kitchens across North America and Europe, Sysco (NYSE:SYY) is a global food distributor that supplies restaurants, healthcare facilities, schools, hotels, and other foodservice establishments with food products and related services.
Why Do We Steer Clear of SYY?
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Unit sales averaged 0.9% growth over the past two years and imply healthy demand for its products
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Free cash flow margin is projected to show no improvement next year
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Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Sysco is trading at $78.43 per share, or 15.4x forward P/E. Dive into our free research report to see why there are better opportunities than SYY.
One Large-Cap Stock to Buy:
Cloudflare (NET)
Market Cap: $124.3 billion
With a massive network spanning more than 310 cities in over 120 countries, Cloudflare (NYSE:NET) provides a global network that delivers security, performance and reliability services to protect websites, applications, and corporate networks.
