While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. 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:
Helios (HLIO)
Trailing 12-Month GAAP Operating Margin: 6.6%
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 Are We Out on HLIO?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings per share were flat over the last five years while its revenue grew, showing its incremental sales were less profitable
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Helios’s stock price of $53.03 implies a valuation ratio of 18.9x forward P/E. Dive into our free research report to see why there are better opportunities than HLIO.
Allstate (ALL)
Trailing 12-Month GAAP Operating Margin: 13.5%
Born from a Sears, Roebuck & Co. initiative during the Great Depression with its famous "You're in good hands" slogan, Allstate (NYSE:ALL) is one of America's largest personal property and casualty insurers, offering protection for autos, homes, and personal property.
Why Are We Wary of ALL?
- Estimated sales growth of 3.6% for the next 12 months implies demand will slow from its two-year trend
- Combined ratio was unchanged over the last five years, suggesting it failed to gain leverage on its fixed costs
- Annual book value per share growth of 3.2% over the last five years lagged behind its insurance peers as its large balance sheet made it difficult to generate incremental capital growth
At $210.70 per share, Allstate trades at 2x forward P/B. Read our free research report to see why you should think twice about including ALL in your portfolio.
One Stock to Watch:
Ollie's (OLLI)
Trailing 12-Month GAAP Operating Margin: 11.1%
Often located in suburban or semi-rural shopping centers, Ollie’s Bargain Outlet (NASDAQ:OLLI) is a discount retailer that acquires excess inventory then sells at meaningful discounts.
Why Could OLLI Be a Winner?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 3.7% growth over the past two years
- Exciting sales outlook for the upcoming 12 months calls for 15.4% growth, an acceleration from its three-year trend
Ollie's is trading at $121.65 per share, or 29.8x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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