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. Keeping that in mind, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist.
Two Stocks to Sell:
Fortune Brands (FBIN)
Trailing 12-Month GAAP Operating Margin: 14.5%
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE: FBIN) makes plumbing, security, and outdoor living products.
Why Do We Pass on FBIN?
- 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
- Performance over the past two years shows each sale was less profitable, as its earnings per share fell by 9.5% annually
- Free cash flow margin dropped by 6.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Fortune Brands is trading at $58.73 per share, or 14.8x forward P/E. If you’re considering FBIN for your portfolio, see our FREE research report to learn more.
IAC (IAC)
Trailing 12-Month GAAP Operating Margin: 3.7%
Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ: IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.
Why Do We Think IAC Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 20.4% annually over the last two years
- Earnings per share have dipped by 41.3% annually over the past four years, which is concerning because stock prices follow EPS over the long term
- Negative returns on capital show management lost money while trying to expand the business
At $36.10 per share, IAC trades at 22x forward P/E. Dive into our free research report to see why there are better opportunities than IAC.
One Stock to Watch:
Apple (AAPL)
Trailing 12-Month GAAP Operating Margin: 31.9%
Creator of the iPhone and App Store, Apple (NASDAQ: AAPL) is a legendary developer of consumer electronics and software.
Why Do We Like AAPL?
- Apple's revenue base is so large because nearly everyone in the U.S. has an iPhone, but this is a double-edged sword. Growth must now come from upgrades, a harder pitch that has resulted in sluggish top-line performance recently.
- Still, Apple's devices have endured for decades, speaking to its brand, design ethos, and technological chops. Its success is rare in the world of consumer electronics, which is fraught because of commoditization, competition, and obsolescence risk.
- The company may not have the best gross margin because of its hardware orientation, but it still manages to produce elite operating and free cash flow margins. This shows it doesn’t need over-the-top marketing campaigns to convince people to buy its products.
Apple’s stock price of $227.02 implies a valuation ratio of 30.4x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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-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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