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".
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 that may struggle to keep up.
Two Stocks to Sell:
Tyson Foods (TSN)
Trailing 12-Month GAAP Operating Margin: 2.7%
Started as a simple trucking business, Tyson Foods (NYSE: TSN) is one of the world’s largest producers of chicken, beef, and pork.
Why Should You Sell TSN?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1.1% for the last three years
- Easily substituted products (and therefore stiff competition) result in an inferior gross margin of 7.4% that must be offset through higher volumes
- Earnings per share have contracted by 25.5% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Tyson Foods is trading at $56.54 per share, or 14.5x forward P/E. Dive into our free research report to see why there are better opportunities than TSN.
Teledyne (TDY)
Trailing 12-Month GAAP Operating Margin: 17.7%
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.
Why Are We Cautious About TDY?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2.5 percentage points
- Underwhelming 6.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
Teledyne’s stock price of $537.91 implies a valuation ratio of 23.8x forward P/E. Check out our free in-depth research report to learn more about why TDY doesn’t pass our bar.
One Stock to Buy:
Huron (HURN)
Trailing 12-Month GAAP Operating Margin: 10.5%
Founded in 2002 during a time of significant regulatory change in corporate America, Huron Consulting Group (NASDAQ: HURN) is a professional services company that helps organizations develop growth strategies, optimize operations, and implement digital transformation solutions.
Why Should You Buy HURN?
- Annual revenue growth of 10.9% over the past two years was outstanding, reflecting market share gains this cycle
- Adjusted operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 27.8% exceeded its revenue gains over the last two years
At $137.73 per share, Huron trades at 17.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 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 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 Kadant (+351% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
