Large-cap stocks are known for their staying power and ability to weather market storms better than smaller competitors. However, their sheer size makes it more challenging to maintain high growth rates as they’ve already captured significant portions of their markets.
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. That said, here is one large-cap stock whose competitive advantages creates flywheel effects and two whose existing offerings may be tapped out.
Two Large-Cap Stocks to Sell:
Illinois Tool Works (ITW)
Market Cap: $78.68 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 Are We Wary of ITW?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 3.2% for the next year implies demand will be shaky
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 3.8% annually
Illinois Tool Works’s stock price of $271.68 implies a valuation ratio of 23.8x forward P/E. Dive into our free research report to see why there are better opportunities than ITW.
PNC Financial Services Group (PNC)
Market Cap: $90.5 billion
Tracing its roots back to 1852 when Pittsburgh's industrial boom demanded stronger financial institutions, PNC (NYSE: PNC) is a diversified financial institution that provides retail banking, corporate banking, and asset management services through a coast-to-coast branch network.
Why Does PNC Worry Us?
- Scale is a double-edged sword because it limits the firm’s growth potential compared to its smaller competitors, as reflected in its below-average annual net interest income increases of 8.8% for the last five years
- Inferior net interest margin of 2.8% means it must compensate for lower profitability through increased loan originations
- Tangible book value per share is projected to decrease by 5.2% over the next 12 months as capital generation weakens
PNC Financial Services Group is trading at $222.54 per share, or 1.5x forward P/B. Check out our free in-depth research report to learn more about why PNC doesn’t pass our bar.
One Large-Cap Stock to Buy:
TransDigm (TDG)
Market Cap: $65.83 billion
Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.
Why Are We Backing TDG?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 10.1% over the past two years
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 26.8% annually, topping its revenue gains
- Robust free cash flow margin of 20.4% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
At $1,167 per share, TransDigm trades at 29.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
