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.
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:
MSCI (MSCI)
Trailing 12-Month GAAP Operating Margin: 53.9%
Originally known as Morgan Stanley Capital International before becoming independent in 2007, MSCI (NYSE: MSCI) provides critical decision support tools, indexes, and analytics that help global investors understand risk and return factors and build more effective investment portfolios.
Why Are We Cautious About MSCI?
- Negative return on equity shows that some of its growth strategies have backfired
MSCI is trading at $578.64 per share, or 32.2x forward P/E. To fully understand why you should be careful with MSCI, check out our full research report (it’s free).
Two Stocks to Buy:
Costco (COST)
Trailing 12-Month GAAP Operating Margin: 3.8%
Designed to be a one-stop shop for the suburban consumer, Costco (NASDAQ: COST) is a membership-only retail chain that sells groceries, apparel, toys, and household items, often in bulk quantities.
Why Will COST Beat the Market?
- Same-store sales growth averaged 5% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Dominant market position is represented by its $268.8 billion in revenue, which compensates for its subpar gross margin
- ROIC punches in at 34.2%, illustrating management’s expertise in identifying profitable investments
At $963.25 per share, Costco trades at 49.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Nubank (NU)
Trailing 12-Month GAAP Operating Margin: 33.7%
With nearly 94 million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE: NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.
Why Will NU Outperform?
- Market share has increased this cycle as its 44.9% annual revenue growth over the last two years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 99.9% over the last two years outstripped its revenue performance
Nubank’s stock price of $15.97 implies a valuation ratio of 22.7x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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-small-cap company Comfort Systems (+782% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
