1 large-cap stock to keep an eye on and 2 we brush off

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 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:

Qualcomm (QCOM)

Market Cap: $190 billion

Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ:QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.

Why Does QCOM Worry Us?

1. The company has faced growth challenges as its 8.6% annual revenue increases over the last two years fell short of other semiconductor companies

2. Sales are projected to tank by 2.9% over the next 12 months as demand evaporates

3. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 12.7 percentage points

At $172.61 per share, Qualcomm trades at 19.2x forward P/E. Check out our free in-depth research report to learn more about why QCOM doesn’t pass our bar.

Target (TGT)

Market Cap: $71.83 billion

With a higher focus on style and aesthetics compared to other large general merchandise retailers, Target (NYSE:TGT) serves the suburban consumer who is looking for a wide range of products under one roof.

Why Do We Think Twice About TGT?

1. Sales were flat over the last three years, indicating it’s failed to expand its business

2. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand

3. Gross margin of 28.1% is below its competitors, leaving less money for marketing and promotions

Target is trading at $158.00 per share, or 16.4x forward P/E. To fully understand why you should be careful with TGT, check out our full research report (it’s free).

One large-cap stock to watch:

Vulcan Materials (VMC)

Market Cap: $34.82 billion

Founded in 1909, Vulcan Materials (NYSE:VMC) is a producer of construction aggregates, primarily crushed stone, sand, and gravel.

Why Do We Watch VMC?

1. Impressive 10.6% annual revenue growth over the last five years indicates it’s winning market share this cycle

2. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient

3. Free cash flow margin expanded by 6.8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends