1 Services Stock for Long-Term Investors and 2 We Brush Off

1 Services Stock for Long-Term Investors and 2 We Brush Off

Jabin Bastian

Tue, February 17, 2026 at 1:40 PM GMT+9 4 min read

In this article:

•                                       StockStory Top Pick 
  

  MRSH

  +0.61%

 CGNX  

 -3.45%  

 

 

 INGM  

 -1.07%  

 

 

 ^GSPC  

 -0.73%  

Business services providers thrive by solving complex operational challenges for their clients, allowing them to focus on their secret sauce. Still, investors are uneasy as firms face challenges from AI-driven disruptors and tightening corporate budgets. These doubts have certainly contributed to services stocks’ recent underperformance - over the past six months, the industry’s 2.3% gain has fallen behind the S&P 500’s 6% rise.

Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. With that said, here is one services stock poised to generate sustainable market-beating returns and two that may face trouble.

Two Business Services Stocks to Sell:

Cognex (CGNX)

Market Cap: $9.74 billion

Founded in 1981 when computer vision was in its infancy, Cognex (NASDAQ:CGNX) develops machine vision systems and software that help manufacturers and logistics companies automate quality inspection and tracking of products.

Why Is CGNX Not Exciting?

4.2% annual revenue growth over the last five years was slower than its business services peers

Incremental sales over the last five years were much less profitable as its earnings per share fell by 1.3% annually while its revenue grew

Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Cognex is trading at $58.61 per share, or 46.8x forward P/E. Read our free research report to see why you should think twice about including CGNX in your portfolio, it’s free.

Ingram Micro (INGM)

Market Cap: $5.07 billion

Operating as the crucial link in the global technology supply chain with a presence in 57 countries, Ingram Micro (NYSE:INGM) is a global technology distributor that connects manufacturers with resellers, providing hardware, software, cloud services, and logistics expertise.

Why Does INGM Worry Us?

Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2.2% for the last five years

Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 7.8% annually

Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of -0.1% for the last five years

At $21.57 per share, Ingram Micro trades at 6.9x forward P/E. If you’re considering INGM for your portfolio, see our FREE research report to learn more.

Story Continues  

One Business Services Stock to Buy:

Marsh & McLennan (MRSH)

Market Cap: $84.27 billion

With roots dating back to 1871 and a presence in over 130 countries, Marsh & McLennan (NYSE:MMC) is a global professional services firm that helps organizations manage risk, strategy, and workforce challenges through its four specialized businesses.

Why Should You Buy MRSH?

Annual revenue growth of 9.4% over the past five years was outstanding, reflecting market share gains this cycle

Unparalleled revenue scale of $26.98 billion gives it an edge in distribution

Strong free cash flow margin of 16.5% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety

Marsh & McLennan’s stock price of $174.06 implies a valuation ratio of 16.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive 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 5 Strong Momentum Stocks for this week. 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.

Terms and Privacy Policy

Privacy Dashboard

More Info