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.

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 leverages its financial strength to beat the competition and two best left off your watchlist.

Two Stocks to Sell:

MYR Group (MYRG)

Trailing 12-Month GAAP Operating Margin: 4.6%

Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ: MYRG) is a specialty contractor in the electrical construction industry.

Why Does MYRG Fall Short?

1. New orders were hard to come by as its average backlog growth of 5.4% over the past two years underwhelmed
2. Gross margin of 10.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
3. Eroding returns on capital suggest its historical profit centers are aging

MYR Group’s stock price of $261.02 implies a valuation ratio of 28x forward P/E. If you’re considering MYRG for your portfolio, see our FREE research report to learn more.

Astec (ASTE)

Trailing 12-Month GAAP Operating Margin: 6.3%

Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ: ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.

Why Are We Wary of ASTE?

1. Muted 2.7% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Demand cratered as it couldn’t win new orders over the past two years, leading to an average 13.1% decline in its backlog
3. Cash-burning history makes us doubt the long-term viability of its business model

Astec is trading at $52.87 per share, or 14.2x forward P/E. Dive into our free research report to see why there are better opportunities than ASTE.

One Stock to Watch:

Upwork (UPWK)

Trailing 12-Month GAAP Operating Margin: 16.4%

Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.

Why Are We Positive On UPWK?

1. Customer spending is rising as the company has focused on monetization over the last two years, leading to 10.1% annual growth in its average revenue per customer
2. Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 197% outpaced its revenue gains
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business

At $12.18 per share, Upwork trades at 5.5x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.