Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. That said, 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:
Royal Caribbean (RCL)
Trailing 12-Month GAAP Operating Margin: 27.3%
Established in 1968, Royal Caribbean Cruises (NYSE: RCL) is a global cruise vacation company renowned for its innovative and exciting cruise experiences.
Why Should You Sell RCL?
- Performance surrounding its passenger cruise days has lagged its peers
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 8.8% for the last two years
- Underwhelming 7.6% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $322.36 per share, Royal Caribbean trades at 17.1x forward P/E. If you’re considering RCL for your portfolio, see our FREE research report to learn more.
Landstar (LSTR)
Trailing 12-Month GAAP Operating Margin: 3.5%
Covering billions of miles throughout North America, Landstar (NASDAQ: LSTR) is a transportation company specializing in freight and last-mile delivery services.
Why Do We Avoid LSTR?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Sales over the last five years were less profitable as its earnings per share fell by 10.7% annually while its revenue was flat
- Waning returns on capital imply its previous profit engines are losing steam
Landstar’s stock price of $169.23 implies a valuation ratio of 26x forward P/E. To fully understand why you should be careful with LSTR, check out our full research report (it’s free).
One Stock to Watch:
Astec (ASTE)
Trailing 12-Month GAAP Operating Margin: 5.7%
Inventing the first ever double-barrel hot-mix asphalt plant, Astec (NASDAQ: ASTE) provides machines and equipment for building roads, processing raw materials, and producing concrete.
Why Are We Fans of ASTE?
- Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 11.2% is above its two-year trend
- Operating margin improvement of 4.6 percentage points over the last five years demonstrates its ability to scale efficiently
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 18.5% outpaced its revenue gains
Astec is trading at $51.42 per share, or 12.9x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
