Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. 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: 2%
The owner of Dr. Scholl's, Caleres (NYSE: CAL) is a footwear company offering a range of styles.
Why Should You Sell CAL?
- Sales trends were unexciting over the last five years as its 3.6% annual growth was below the typical consumer discretionary company
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Caleres is trading at $11.87 per share, or 6.6x forward P/E. Dive into our free research report to see why there are better opportunities than CAL.
Two Stocks to Watch:
AMD (AMD)
Trailing 12-Month GAAP Operating Margin: 11.7%
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
Why Could AMD Be a Winner?
- Impressive 26.8% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Projected revenue growth of 49.5% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Earnings per share grew by 23% annually over the last five years and easily exceeded the peer group average
AMD’s stock price of $505.23 implies a valuation ratio of 56.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Construction Partners (ROAD)
Trailing 12-Month GAAP Operating Margin: 8.3%
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Why Will ROAD Beat the Market?
- Annual revenue growth of 39.9% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 46.7% annually, topping its revenue gains
- Free cash flow margin expanded by 7.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $105.05 per share, Construction Partners trades at 33.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
