Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 generates reliable profits without sacrificing growth and two that may face some trouble.
Two Stocks to Sell:
Tapestry (TPR)
Trailing 12-Month GAAP Operating Margin: 5.9%
Originally founded as Coach, Tapestry (NYSE: TPR) is an American fashion conglomerate with a portfolio of luxury brands offering high-quality accessories and fashion products.
Why Do We Think Twice About TPR?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Estimated sales growth of 3.1% for the next 12 months is soft and implies weaker demand
- Waning returns on capital imply its previous profit engines are losing steam
At $116.50 per share, Tapestry trades at 21.3x forward P/E. To fully understand why you should be careful with TPR, check out our full research report (it’s free for active Edge members).
Valmont (VMI)
Trailing 12-Month GAAP Operating Margin: 9.9%
Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE: VMI) provides engineered products and infrastructure services for the agricultural industry.
Why Are We Wary of VMI?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Projected sales growth of 2.9% for the next 12 months suggests sluggish demand
- Earnings per share lagged its peers over the last two years as they only grew by 6.8% annually
Valmont’s stock price of $426.99 implies a valuation ratio of 24.3x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than VMI.
One Stock to Watch:
Astrana Health (ASTH)
Trailing 12-Month GAAP Operating Margin: 2.9%
Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ: ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.
Why Do We Like ASTH?
- Annual revenue growth of 36.6% over the past two years was outstanding, reflecting market share gains this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 59.1%
- Earnings per share have massively outperformed its peers over the last five years, increasing by 19.6% annually
Astrana Health is trading at $31.40 per share, or 6x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
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 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
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