ETFOptimize | High-performance ETF-based Investment Strategies

Quantitative strategies, Wall Street-caliber research, and insightful market analysis since 1998.


ETFOptimize | HOME
Close Window

3 Profitable Stocks in Hot Water

MOG.A Cover Image

A company with profits isn’t always 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. Keeping that in mind, here are three profitable companies to steer clear of and a few better alternatives.

Moog (MOG.A)

Trailing 12-Month GAAP Operating Margin: 9.2%

Responsible for the flight control actuation system integrated in the B-2 stealth bomber, Moog (NYSE: MOG.A) provides precision motion control solutions used in aerospace and defense applications

Why Does MOG.A Worry Us?

  1. 4.2% annual revenue growth over the last five years was slower than its industrials peers
  2. Estimated sales growth of 1.7% for the next 12 months implies demand will slow from its two-year trend
  3. 12.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Moog is trading at $188.83 per share, or 21.4x forward P/E. To fully understand why you should be careful with MOG.A, check out our full research report (it’s free).

Union Pacific (UNP)

Trailing 12-Month GAAP Operating Margin: 40.1%

Part of the transcontinental railroad project, Union Pacific (NYSE: UNP) is a freight transportation company that operates a major railroad network.

Why Do We Think UNP Will Underperform?

  1. Underwhelming unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
  2. Flat earnings per share over the last two years underperformed the sector average
  3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6 percentage points

Union Pacific’s stock price of $229.50 implies a valuation ratio of 19.1x forward P/E. Check out our free in-depth research report to learn more about why UNP doesn’t pass our bar.

ICU Medical (ICUI)

Trailing 12-Month GAAP Operating Margin: 5%

Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ: ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.

Why Are We Out on ICUI?

  1. Muted 2.2% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
  2. Sales are projected to tank by 12.3% over the next 12 months as demand evaporates
  3. Incremental sales over the last five years were much less profitable as its earnings per share fell by 1.1% annually while its revenue grew

At $138 per share, ICU Medical trades at 19.2x forward P/E. Read our free research report to see why you should think twice about including ICUI in your portfolio.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking 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 176% over the last five years.

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.

Stock Quote API & Stock News API supplied by www.cloudquote.io
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms Of Service.


 

IntelligentValue Home
Close Window

DISCLAIMER

All content herein is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor should it be interpreted as a recommendation to buy, hold or sell (short or otherwise) any security.  All opinions, analyses, and information included herein are based on sources believed to be reliable, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. We undertake no obligation to update such opinions, analysis or information. You should independently verify all information contained on this website. Some information is based on analysis of past performance or hypothetical performance results, which have inherent limitations. We make no representation that any particular equity or strategy will or is likely to achieve profits or losses similar to those shown. Shareholders, employees, writers, contractors, and affiliates associated with ETFOptimize.com may have ownership positions in the securities that are mentioned. If you are not sure if ETFs, algorithmic investing, or a particular investment is right for you, you are urged to consult with a Registered Investment Advisor (RIA). Neither this website nor anyone associated with producing its content are Registered Investment Advisors, and no attempt is made herein to substitute for personalized, professional investment advice. Neither ETFOptimize.com, Global Alpha Investments, Inc., nor its employees, service providers, associates, or affiliates are responsible for any investment losses you may incur as a result of using the information provided herein. Remember that past investment returns may not be indicative of future returns.

Copyright © 1998-2017 ETFOptimize.com, a publication of Optimized Investments, Inc. All rights reserved.