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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here is one profitable company that balances growth and profitability and two best left off your watchlist.
Two Stocks to Sell:
Alamo (ALG)
Trailing 12-Month GAAP Operating Margin: 10.4%
Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.
Why Do We Think Twice About ALG?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.1%
- Earnings per share have dipped by 2.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
Alamo is trading at $221.52 per share, or 19x forward P/E. If you’re considering ALG for your portfolio, see our FREE research report to learn more.
Donnelley Financial Solutions (DFIN)
Trailing 12-Month GAAP Operating Margin: 17.6%
Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE: DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.
Why Are We Hesitant About DFIN?
- Annual sales declines of 2.5% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 4.3% annually
At $56.27 per share, Donnelley Financial Solutions trades at 2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than DFIN.
One Stock to Buy:
Raymond James (RJF)
Trailing 12-Month GAAP Operating Margin: 20.8%
Founded in 1962 and headquartered in St. Petersburg, Florida, Raymond James Financial (NYSE: RJF) is a diversified financial services company that provides wealth management, investment banking, asset management, and banking services to individuals and institutions.
Why Will RJF Outperform?
- Solid 11.2% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Annual tangible book value per share growth of 16.1% over the past two years was outstanding, reflecting strong capital accumulation this cycle
Raymond James’s stock price of $165.27 implies a valuation ratio of 15.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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 Tecnoglass (+1,754% 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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