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. Keeping that in mind, here are two large-cap stocks whose competitive advantages create flywheel effects and one whose existing offerings may be tapped out.
One Large-Cap Stock to Sell:
United Parcel Service (UPS)
Market Cap: $81.43 billion
Trademarking its recognizable UPS Brown color, UPS (NYSE: UPS) offers package delivery, supply chain management, and freight forwarding services.
Why Should You Sell UPS?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Eroding returns on capital suggest its historical profit centers are aging
United Parcel Service is trading at $96.42 per share, or 14x forward P/E. To fully understand why you should be careful with UPS, check out our full research report (it’s free for active Edge members).
Two Large-Cap Stocks to Watch:
Robinhood (HOOD)
Market Cap: $110.2 billion
With a mission to democratize finance, Robinhood (NASDAQ: HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.
Why Will HOOD Outperform?
- Monetization efforts are paying off as its average revenue per user has grown by 47.7% annually over the last two years
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 58.5% annually, topping its revenue gains
- Robust free cash flow margin of 49.6% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
At $123.41 per share, Robinhood trades at 33.9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Parker-Hannifin (PH)
Market Cap: $105 billion
Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.
Why Should PH Be on Your Watchlist?
- Highly efficient business model is illustrated by its impressive 18.2% operating margin, and its rise over the last five years was fueled by some leverage on its fixed costs
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 20.7% exceeded its revenue gains over the last five years
- Strong free cash flow margin of 14.8% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
Parker-Hannifin’s stock price of $837.00 implies a valuation ratio of 27.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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