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.
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 balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
Arcos Dorados (ARCO)
Trailing 12-Month GAAP Operating Margin: 7.9%
Translating to “Golden Arches” in Spanish, Arcos Dorados (NYSE: ARCO) is the master franchisee of the McDonald's brand in Latin America and the Caribbean, responsible for its operations and growth in over 20 countries.
Why Do We Think Twice About ARCO?
- Gross margin of 12.7% is below its competitors, leaving less money for marketing and promotions
- Subpar operating margin of 7.3% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Poor free cash flow margin of -0.7% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $7.34 per share, Arcos Dorados trades at 11.6x forward P/E. Read our free research report to see why you should think twice about including ARCO in your portfolio.
Sealed Air (SEE)
Trailing 12-Month GAAP Operating Margin: 13.6%
Founded in 1960, Sealed Air Corporation (NYSE: SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.
Why Do We Steer Clear of SEE?
- Flat unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Sales are projected to be flat over the next 12 months and imply weak demand
- Eroding returns on capital suggest its historical profit centers are aging
Sealed Air is trading at $41.37 per share, or 12.8x forward P/E. To fully understand why you should be careful with SEE, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Celsius (CELH)
Trailing 12-Month GAAP Operating Margin: 4.5%
With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.
Why Is CELH on Our Radar?
- Annual revenue growth of 54.2% over the past three years was outstanding, reflecting market share gains
- Earnings per share have massively outperformed its peers over the last three years, increasing by 321% annually
- CELH 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
Celsius’s stock price of $45.57 implies a valuation ratio of 31.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
