Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that leverages its financial strength to beat the competition and two that may struggle to keep up.
Two Stocks to Sell:
Adtalem (ATGE)
Trailing 12-Month GAAP Operating Margin: 19.3%
Formerly known as DeVry Education Group, Adtalem Global Education (NYSE:ATGE) is a global provider of workforce solutions and educational services.
Why Does ATGE Worry Us?
- 11% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Estimated sales growth of 7.5% for the next 12 months implies demand will slow from its two-year trend
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Adtalem’s stock price of $153.81 implies a valuation ratio of 19.6x forward P/E. To fully understand why you should be careful with ATGE, check out our full research report (it’s free for active Edge members).
Champion Homes (SKY)
Trailing 12-Month GAAP Operating Margin: 10.2%
Founded in 1951, Champion Homes (NYSE:SKY) is a manufacturer of modular homes and buildings in North America.
Why Do We Think Twice About SKY?
- Sales trends were unexciting over the last two years as its 4.4% annual growth was below the typical industrials company
- Earnings per share fell by 19.2% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Champion Homes is trading at $76.45 per share, or 22.8x forward P/E. Dive into our free research report to see why there are better opportunities than SKY.
One Stock to Watch:
BGC (BGC)
Trailing 12-Month GAAP Operating Margin: 6.2%
Tracing its roots back to 1945 and named after founder Bernard Gerald Cantor, BGC Group (NASDAQ:BGC) operates a global brokerage and financial technology platform that facilitates trading across fixed income, foreign exchange, equities, energy, and commodities markets.
Why Does BGC Stand Out?
- Annual revenue growth of 16.8% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales over the last two years boosted profitability as its annual earnings per share growth of 21.7% outstripped its revenue performance
- Management team has demonstrated it can invest in profitable ventures through its 10.9% five-year return on equity
At $9.47 per share, BGC trades at 7.4x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
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Don’t let fear keep you from great opportunities and take a look at 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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