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. That said, 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:

Monarch (MCRI)

Trailing 12-Month GAAP Operating Margin: 18.6%

Established in 1993, Monarch (NASDAQ: MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.

Why Do We Think Twice About MCRI?

1. Lackluster 4% annual revenue growth over the last two years indicates the company is losing ground to competitors
2. Anticipated sales growth of 4.5% for the next year implies demand will be shaky

Monarch is trading at $101.88 per share, or 20.4x forward P/E. Read our free research report to see why you should think twice about including MCRI in your portfolio.

3M (MMM)

Trailing 12-Month GAAP Operating Margin: 19.6%

Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.

Why Is MMM Risky?

1. 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
2. Earnings per share have contracted by 2.2% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

At $155.30 per share, 3M trades at 19.4x forward P/E. Dive into our free research report to see why there are better opportunities than MMM.

One Stock to Buy:

Aris Water (ARIS)

Trailing 12-Month GAAP Operating Margin: 23%

Primarily serving the oil and gas industry, Aris Water (NYSE: ARIS) is a provider of water handling and recycling solutions.

Why Is ARIS a Top Pick?

1. Annual revenue growth of 23.8% over the last five years was superb and indicates its market share increased during this cycle
2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 30.4% outpaced its revenue gains
3. Free cash flow margin grew by 38.4 percentage points over the last five years, giving the company more chips to play with

Aris Water’s stock price of $23.77 implies a valuation ratio of 14.8x 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

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 6 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-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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