Large-Cap Stocks: O'Reilly and DexCom Shine, Salesforce Stumbles

Two large-cap stocks are showing significant potential for growth: O'Reilly Automotive (ORLY) and DexCom (DXCM). Meanwhile, Salesforce (CRM) is facing headwinds due to slowing sales growth.

O'Reilly Automotive's locations open for at least a year have seen increased demand, with same-store sales averaging 4.9% growth over the past two years. The company has achieved strong operating margins of 19.4% and a return on capital of 42.2%, demonstrating effective management.

DexCom develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks. Its core business is healthy, with organic revenue growth averaging 12% over the past two years. The company's free cash flow margin has expanded by 20.2 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends.

On the other hand, Salesforce is facing challenges due to its slowing sales growth. Its average billings growth of 11.2% underwhelmed expectations over the last year, while anticipated sales growth of 10.4% for the next year suggests demand will be shaky. The company's operating margin remained unchanged over the last year, indicating it failed to gain leverage on its fixed costs.