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".
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that generates reliable profits without sacrificing growth and two best left off your watchlist.
Two Stocks to Sell:
Steven Madden (SHOO)
Trailing 12-Month GAAP Operating Margin: 5.8%
As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ: SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.
Why Are We Hesitant About SHOO?
- Annual revenue growth of 9.4% over the last two years was below our standards for the consumer discretionary sector
- Poor free cash flow margin of 7.9% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Waning returns on capital imply its previous profit engines are losing steam
Steven Madden is trading at $35 per share, or 21.6x forward P/E. Dive into our free research report to see why there are better opportunities than SHOO.
Intercontinental Exchange (ICE)
Trailing 12-Month GAAP Operating Margin: 48.5%
Starting as an energy trading platform in 2000 before acquiring the iconic New York Stock Exchange in 2013, Intercontinental Exchange (NYSE: ICE) operates global financial exchanges, clearing houses, and provides data services and mortgage technology solutions to financial institutions and corporations.
Why Does ICE Give Us Pause?
- Performance over the past five years shows its incremental sales were less profitable, as its 8.9% annual earnings per share growth trailed its revenue gains
Intercontinental Exchange’s stock price of $154.36 implies a valuation ratio of 21.7x forward P/E. Read our free research report to see why you should think twice about including ICE in your portfolio.
One Stock to Buy:
Astronics (ATRO)
Trailing 12-Month GAAP Operating Margin: 5.4%
Integrating power outlets into many Boeing aircraft, Astronics (NASDAQ: ATRO) is a provider of technologies and services to the global aerospace, defense, and electronics industries.
Why Are We Backing ATRO?
- Impressive 15.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Free cash flow flipped to positive over the last five years, showing the company has crossed a key inflection point
- Improving returns on capital suggest its past investments are beginning to deliver value
At $45.50 per share, Astronics trades at 24.6x forward P/E. Is now a good 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
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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