Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

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 balances growth and profitability and two that may face some trouble.

Two Stocks to Sell:

Applied Industrial (AIT)

Trailing 12-Month GAAP Operating Margin: 10.9%

Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE: AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.

Why Is AIT Not Exciting?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6.1%
3. Earnings per share lagged its peers over the last two years as they only grew by 7% annually

Applied Industrial is trading at $246.74 per share, or 23.4x forward P/E. If you’re considering AIT for your portfolio, see our FREE research report to learn more.

Jabil (JBL)

Trailing 12-Month GAAP Operating Margin: 4%

With manufacturing facilities spanning the globe from China to Mexico to the United States, Jabil (NYSE: JBL) provides electronics design, manufacturing, and supply chain solutions to companies across various industries, from healthcare to automotive to cloud computing.

Why Does JBL Give Us Pause?

1. Sales tumbled by 7.3% annually over the last two years, showing market trends are working against its favor during this cycle
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 6.5% annually
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 3.1% for the last five years

Jabil’s stock price of $199.90 implies a valuation ratio of 18x forward P/E. Check out our free in-depth research report to learn more about why JBL doesn’t pass our bar.

One Stock to Watch:

Boston Scientific (BSX)

Trailing 12-Month GAAP Operating Margin: 17%

Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE: BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.

Why Is BSX Interesting?

1. Average organic revenue growth of 15.6% over the past two years demonstrates its ability to expand independently without relying on acquisitions
2. Projected revenue growth of 13.5% for the next 12 months suggests its momentum from the last two years will persist
3. Additional sales over the last five years increased its profitability as the 18.4% annual growth in its earnings per share outpaced its revenue

At $94.80 per share, Boston Scientific trades at 30.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

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 6 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 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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