Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.
This is precisely where StockStory comes in - our job is to find you high-quality companies that can win regardless of the conditions. That said, here are three large-cap stocks whose existing offerings may be tapped out and some other investments you should look into instead.
Corning (GLW)
Market Cap: $39.89 billion
Supplying windows for some of the United States’s earliest spacecraft, Corning (NYSE:GLW) provides glass and other electronic components for the consumer electronics, telecommunications, automotive, and healthcare industries.
Why Are We Out on GLW?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.5% annually over the last two years
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- ROIC of 4.6% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
Corning’s stock price of $46.30 implies a valuation ratio of 20x forward price-to-earnings. Read our free research report to see why you should think twice about including GLW in your portfolio.
Old Dominion Freight Line (ODFL)
Market Cap: $36.18 billion
With its name deriving from the Commonwealth of Virginia’s nickname, Old Dominion (NASDAQ:ODFL) delivers less-than-truckload (LTL) and full-container load freight.
Why Are We Hesitant About ODFL?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Anticipated sales growth of 2.5% for the next year implies demand will be shaky
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
At $169.70 per share, Old Dominion Freight Line trades at 30.1x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ODFL.
Dell (DELL)
Market Cap: $67.76 billion
Founded by Michael Dell in his University of Texas dorm room in 1984 with just $1,000, Dell Technologies (NYSE:DELL) provides hardware, software, and services that help organizations build their IT infrastructure, manage cloud environments, and enable digital transformation.
Why Do We Steer Clear of DELL?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.3% annually over the last two years
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 2.1% annually
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.7 percentage points
Dell is trading at $96 per share, or 10.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why DELL doesn’t pass our bar.
Stocks We Like More
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