Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 best left off your watchlist.
Two Stocks to Sell:
Whirlpool (WHR)
Trailing 12-Month GAAP Operating Margin: 2.8%
Credited with introducing the first automatic washing machine, Whirlpool (NYSE: WHR) is a manufacturer of a variety of home appliances.
Why Do We Avoid WHR?
- Underwhelming unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- 9× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Whirlpool’s stock price of $77 implies a valuation ratio of 8.3x forward P/E. To fully understand why you should be careful with WHR, check out our full research report (it’s free).
TD SYNNEX (SNX)
Trailing 12-Month GAAP Operating Margin: 2%
Serving as the crucial middleman in the technology supply chain, TD SYNNEX (NYSE: SNX) is a global technology distributor that connects thousands of IT manufacturers with resellers, helping businesses access hardware, software, and technology solutions.
Why Are We Wary of SNX?
- Sales tumbled by 2.4% annually over the last two years, showing market trends are working against its favor during this cycle
- Earnings per share fell by 3.4% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- 8.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $121.43 per share, TD SYNNEX trades at 9.1x forward P/E. Check out our free in-depth research report to learn more about why SNX doesn’t pass our bar.
One Stock to Watch:
CECO Environmental (CECO)
Trailing 12-Month GAAP Operating Margin: 14.7%
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ: CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
Why Could CECO Be a Winner?
- Impressive 17.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Projected revenue growth of 22.6% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Adjusted operating margin expanded by 10.8 percentage points over the last five years as it scaled and became more efficient
CECO Environmental is trading at $27.31 per share, or 21.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 176% over the last five years.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
