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 are three large-cap stocks whose existing offerings may be tapped out and some other investments you should look into instead.
Tapestry (TPR)
Market Cap: $31.48 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?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Poor expense management has led to an operating margin of 13.3% that is below the industry average
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Tapestry’s stock price of $156.75 implies a valuation ratio of 23.4x forward P/E. Check out our free in-depth research report to learn more about why TPR doesn’t pass our bar.
Illinois Tool Works (ITW)
Market Cap: $83.76 billion
Founded by Byron Smith, an investor who held over 100 patents, Illinois Tool Works (NYSE: ITW) manufactures engineered components and specialized equipment for numerous industries.
Why Does ITW Worry Us?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Anticipated sales growth of 3.2% for the next year implies demand will be shaky
- Earnings per share lagged its peers over the last two years as they only grew by 3.8% annually
At $290.61 per share, Illinois Tool Works trades at 25.8x forward P/E. Read our free research report to see why you should think twice about including ITW in your portfolio.
General Motors (GM)
Market Cap: $71.15 billion
Founded in 1908 by William C. Durant, General Motors (NYSE: GM) offers a range of vehicles and automobiles through brands such as Chevrolet, Buick, GMC, and Cadillac.
Why Does GM Fall Short?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Gross margin of 12.2% reflects its high production costs
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 5.8 percentage points
General Motors is trading at $78.55 per share, or 6.5x forward P/E. If you’re considering GM for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.
