2 S&P 500 Stocks on Our Watchlist and 1 We Ignore

2 S&P 500 Stocks on Our Watchlist and 1 We Ignore

Anthony Lee

Thu, February 12, 2026 at 1:36 PM GMT+9 3 min read

In this article:

•                                       StockStory Top Pick 
  

  KLAC

  +3.40%

 ^GSPC  

 -0.00%  

 

 

 BKNG  

 +0.73%  

 

 

 TPR  

 +0.97%  

The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.

Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. Keeping that in mind, here are two S&P 500 stocks that could deliver good returns and one that could be in trouble.

One Stock to Sell:

Tapestry (TPR)

Market Cap: $31.32 billion

Originally founded as Coach, Tapestry (NYSE:TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.

Why Should You Dump TPR?

Weak constant currency growth over the past two years indicates challenges in maintaining its market share

Operating margin of 13.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments

Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned

Tapestry’s stock price of $155.35 implies a valuation ratio of 22.4x forward P/E. Dive into our free research report to see why there are better opportunities than TPR.

Two Stocks to Watch:

KLA Corporation (KLAC)

Market Cap: $193.9 billion

Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ:KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.

Why Should You Buy KLAC?

Annual revenue growth of 16% over the past five years was outstanding, reflecting market share gains this cycle

Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 60.7%

Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety

At $1,478 per share, KLA Corporation trades at 34.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Booking (BKNG)

Market Cap: $139 billion

Formerly known as The Priceline Group, Booking Holdings (NASDAQ:BKNG) is the world’s largest online travel agency.

Why Do We Like BKNG?

Prominent and differentiated platform results in a best-in-class gross margin of 85.9%

Share repurchases have amplified shareholder returns as its annual earnings per share growth of 34.1% exceeded its revenue gains over the last three years

Strong free cash flow margin of 34.3% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business

 






Story Continues  

Booking is trading at $4,305 per share, or 13x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

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