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”.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here is one profitable company that generates reliable profits without sacrificing growth and two that may struggle to keep up.
Two stocks to sell:
CNO Financial Group (CNO)
Trailing 12-Month GAAP Operating Margin: 15.5%
Rebranded from Conseco in 2010 to signal a fresh start after navigating financial challenges, CNO Financial Group (NYSE: CNO) develops and markets health insurance, annuities, and life insurance products primarily targeting middle-income pre-retirees and retirees.
Why Do We Think CNO Will Underperform?
- 1.2% annualized net premiums earned growth over the last five years lagged behind its insurance peers
- Day-to-day expenses have swelled relative to revenue over the last five years as its pre-tax profit margin fell by 7.7 percentage points
- Annual book value per share declines of 7.5% for the past five years show its capital management struggled during this cycle
At $53.66 per share, CNO Financial Group trades at 1.9x forward P/B. If you’re considering CNO for your portfolio, see our FREE research report to learn more.
TETRA Technologies (TTI)
Trailing 12-Month GAAP Operating Margin: 7.3%
Operating across six continents with approximately 40,000 acres of mineral-rich brine leases in Arkansas, TETRA Technologies (NYSE: TTI) provides well completion fluids and water management services to oil and gas operators.
Why Do We Steer Clear of TTI?
- Annual sales declines of 3.4% for the past ten years show its products and services struggled to connect with the market during this cycle
- Modest revenue base of $641.8 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Costly operations and weak unit economics result in an inferior gross margin of 29.3% that must be offset through higher production volumes
TETRA Technologies’s stock price of $5.42 implies a valuation ratio of 19.8x forward P/E. To fully understand why you should be careful with TTI, check out our full research report (it’s free).
One stock to watch:
Freshworks (FRSH)
Trailing 12-Month GAAP Operating Margin: 3.3%
Starting as a customer service solution before expanding into a comprehensive software suite, Freshworks (NASDAQ: FRSH) provides AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales, and marketing functions.
Why Could FRSH Be a Winner?
- Solid 24% annual revenue growth over the last five years underscores its software’s appeal to businesses
- Software is difficult to replicate at scale and results in a premier gross margin of 85%
- Strong free cash flow margin of 25.1% enables it to reinvest or return capital consistently
Freshworks is trading at $15.36 per share, or 4.1x forward price-to-sales. Is now the right 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 is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
