Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. Keeping that in mind, here is one profitable company that balances growth and profitability and two best left off your watchlist.
Two Stocks to Sell:
Genuine Parts (GPC)
Trailing 12-Month GAAP Operating Margin: 5.1%
Largely targeting the professional customer, Genuine Parts (NYSE: GPC) sells auto and industrial parts such as batteries, belts, bearings, and machine fluids.
Why Does GPC Give Us Pause?
- Annual sales growth of 4.2% over the last six years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 2.1 percentage points
Genuine Parts’s stock price of $127.50 implies a valuation ratio of 15.3x forward P/E. To fully understand why you should be careful with GPC, check out our full research report (it’s free).
Newmark (NMRK)
Trailing 12-Month GAAP Operating Margin: 5.6%
Founded in 1929, Newmark (NASDAQ: NMRK) provides commercial real estate services, including leasing advisory, global corporate services, investment sales and capital markets, property and facilities management, valuation and advisory, and consulting.
Why Do We Think NMRK Will Underperform?
- Lackluster 4.9% annual revenue growth over the last five years indicates the company is losing ground to competitors
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Underwhelming 3.1% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $11.04 per share, Newmark trades at 7.6x forward P/E. Read our free research report to see why you should think twice about including NMRK in your portfolio.
One Stock to Watch:
BrightSpring Health Services (BTSG)
Trailing 12-Month GAAP Operating Margin: 2.2%
Founded in 1974, BrightSpring Health Services (NASDAQ: BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.
Why Is BTSG on Our Radar?
- Annual revenue growth of 20.9% over the last two years was superb and indicates its market share increased during this cycle
- Estimated revenue growth of 9.1% for the next 12 months implies its momentum over the last two years will continue
- Annual earnings per share growth of 6.9% over the last three years modestly outpaced its peers
BrightSpring Health Services is trading at $23.21 per share, or 36.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
