Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Caleres (CAL)
Trailing 12-Month GAAP Operating Margin: 1.7%
The owner of Dr. Scholl's, Caleres (NYSE: CAL) is a footwear company offering a range of styles.
Why Should You Dump CAL?
- Annual revenue growth of 5.4% over the last five years was below our standards for the consumer discretionary sector
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- 8× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
At $11.04 per share, Caleres trades at 7.4x forward P/E. Check out our free in-depth research report to learn more about why CAL doesn’t pass our bar.
Two Stocks to Watch:
GE Aerospace (GE)
Trailing 12-Month GAAP Operating Margin: 19.5%
One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE: GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare.
Why Is GE a Good Business?
- Impressive 16.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Share buybacks catapulted its annual earnings per share growth to 41.9%, which outperformed its revenue gains over the last two years
- GE is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
GE Aerospace’s stock price of $295.63 implies a valuation ratio of 38.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
W. R. Berkley (WRB)
Trailing 12-Month GAAP Operating Margin: 15.9%
Founded in 1967 and operating through more than 50 specialized insurance units across the globe, W. R. Berkley (NYSE: WRB) underwrites commercial insurance and reinsurance through specialized subsidiaries serving industries from healthcare to construction to transportation.
Why Is WRB Interesting?
- Net premiums earned expanded by 12.1% annually over the last five years, demonstrating exceptional market penetration this cycle
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
W. R. Berkley is trading at $65.44 per share, or 2.4x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
