Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
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:
Nature's Sunshine (NATR)
Trailing 12-Month GAAP Operating Margin: 4.4%
Started on a kitchen table in Utah, Nature’s Sunshine (NASDAQ: NATR) manufactures and sells nutritional and personal care products.
Why Is NATR Not Exciting?
- Sales stagnated over the last three years and signal the need for new growth strategies
- Subscale operations are evident in its revenue base of $460.8 million, meaning it has fewer distribution channels than its larger rivals
- Estimated sales growth of 1.3% for the next 12 months is soft and implies weaker demand
At $15.52 per share, Nature's Sunshine trades at 19.5x forward P/E. Read our free research report to see why you should think twice about including NATR in your portfolio.
Helios (HLIO)
Trailing 12-Month GAAP Operating Margin: 9.5%
Founded on the principle of treating others as one wants to be treated, Helios (NYSE: HLIO) designs, manufactures, and sells motion and electronic control components for various sectors.
Why Should You Sell HLIO?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.9% annually
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Helios is trading at $52.13 per share, or 24.2x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than HLIO.
One Stock to Buy:
CSW (CSW)
Trailing 12-Month GAAP Operating Margin: 20.1%
With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ: CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.
Why Will CSW Beat the Market?
- Market share has increased this cycle as its 19.6% annual revenue growth over the last five years was exceptional
- Additional sales over the last five years increased its profitability as the 25.9% annual growth in its earnings per share outpaced its revenue
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
CSW’s stock price of $242.75 implies a valuation ratio of 24.3x forward P/E. 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
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound 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-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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