Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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

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 that may face some trouble.

Two Stocks to Sell:

General Mills (GIS)

Trailing 12-Month GAAP Operating Margin: 21.9%

Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE: GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.

Why Does GIS Fall Short?

1. Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
2. Sales are projected to tank by 3.2% over the next 12 months as demand evaporates further
3. Free cash flow margin dropped by 3.1 percentage points over the last year, implying the company became more capital intensive as competition picked up

At $48.36 per share, General Mills trades at 13.1x forward P/E. Read our free research report to see why you should think twice about including GIS in your portfolio.

Kimball Electronics (KE)

Trailing 12-Month GAAP Operating Margin: 4.2%

Founded in 1961, Kimball Electronics (NYSE: KE) is a global contract manufacturer specializing in electronics and manufacturing solutions for automotive, medical, and industrial markets.

Why Should You Dump KE?

1. Sales tumbled by 10.8% annually over the last two years, showing market trends are working against its favor during this cycle
2. Earnings per share have contracted by 2.4% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. Poor free cash flow margin of -0.1% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

Kimball Electronics’s stock price of $27.05 implies a valuation ratio of 21.3x forward P/E. Dive into our free research report to see why there are better opportunities than KE.

One Stock to Buy:

ServiceNow (NOW)

Trailing 12-Month GAAP Operating Margin: 13.9%

Built on a single code base that processes over 4 billion workflow transactions daily, ServiceNow (NYSE: NOW) provides a cloud-based platform that helps organizations automate and digitize workflows across departments, from IT and HR to customer service and security.

Why Will NOW Beat the Market?

1. Current remaining performance obligations (cRPO) have averaged 21.8% growth over the last year, showing it has a pipeline of unfulfilled contracts that will support revenue in the future
2. Highly efficient business model is illustrated by its impressive 13.9% operating margin, and its operating leverage amplified its profits over the last year
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

ServiceNow is trading at $817.12 per share, or 11.3x forward price-to-sales. 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

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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 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

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