While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".

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 balances growth and profitability and two best left off your watchlist.

Two Stocks to Sell:

Mondelez (MDLZ)

Trailing 12-Month GAAP Operating Margin: 11.8%

Founded as Nabisco in 1903, Mondelez (NASDAQ: MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.

Why Do We Think Twice About MDLZ?

1. Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 6.8 percentage points
2. Performance over the past three years shows its incremental sales were less profitable, as its 3.5% annual earnings per share growth trailed its revenue gains
3. ROIC of 8% reflects management’s challenges in identifying attractive investment opportunities

At $69.04 per share, Mondelez trades at 22.8x forward P/E. Read our free research report to see why you should think twice about including MDLZ in your portfolio.

Strategic Education (STRA)

Trailing 12-Month GAAP Operating Margin: 12.5%

Formed through the merger of Strayer Education and Capella Education in 2018, Strategic Education (NASDAQ: STRA) is a career-focused higher education provider.

Why Do We Avoid STRA?

1. Demand for its offerings was relatively low as its number of domestic students has underwhelmed
2. Earnings per share fell by 7.5% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Underwhelming 3.7% return on capital reflects management’s difficulties in finding profitable growth opportunities

Strategic Education is trading at $80.77 per share, or 14.2x forward P/E. Check out our free in-depth research report to learn more about why STRA doesn’t pass our bar.

One Stock to Watch:

Molina Healthcare (MOH)

Trailing 12-Month GAAP Operating Margin: 4.1%

Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.

Why Are We Positive On MOH?

1. Impressive 19.4% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Scale advantages are evident in its $41.87 billion revenue base, which provides operating leverage when demand is strong
3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 14.5% annually

Molina Healthcare’s stock price of $234.44 implies a valuation ratio of 9.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

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 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-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