While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here is one profitable company that generates reliable profits without sacrificing growth and two best left off your watchlist.
Two Stocks to Sell:
General Motors (GM)
Trailing 12-Month GAAP Operating Margin: 1.6%
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 Are We Wary of GM?
- Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 12.2%
- Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 5.8 percentage points
General Motors’s stock price of $86.52 implies a valuation ratio of 6.8x forward P/E. Check out our free in-depth research report to learn more about why GM doesn’t pass our bar.
Waters Corporation (WAT)
Trailing 12-Month GAAP Operating Margin: 26.5%
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE: WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Why Are We Hesitant About WAT?
- Sales trends were unexciting over the last two years as its 1.8% annual growth was below the typical healthcare company
- 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
- Waning returns on capital imply its previous profit engines are losing steam
Waters Corporation is trading at $373.26 per share, or 27.8x forward P/E. Dive into our free research report to see why there are better opportunities than WAT.
One Stock to Buy:
Astronics (ATRO)
Trailing 12-Month GAAP Operating Margin: 7.2%
Integrating power outlets into many Boeing aircraft, Astronics (NASDAQ: ATRO) is a provider of technologies and services to the global aerospace, defense, and electronics industries.
Why Do We Love ATRO?
- Market share has increased this cycle as its 12.9% annual revenue growth over the last two years was exceptional
- Free cash flow margin expanded by 10.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Historical investments are beginning to pay off as its returns on capital are growing
At $76.99 per share, Astronics trades at 31.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 Growth Stocks for this month. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
