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".
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:
MasterCraft (MCFT)
Trailing 12-Month GAAP Operating Margin: 5.6%
Started by a waterskiing instructor, MasterCraft (NASDAQ: MCFT) specializes in designing, manufacturing, and selling sport boats.
Why Should You Sell MCFT?
- Number of boats sold has disappointed over the past two years, indicating weak demand for its offerings
- Projected 1.9 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
MasterCraft’s stock price of $23.65 implies a valuation ratio of 15x forward P/E. To fully understand why you should be careful with MCFT, check out our full research report (it’s free).
Zebra (ZBRA)
Trailing 12-Month GAAP Operating Margin: 13%
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ: ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Why Are We Cautious About ZBRA?
- 3.9% annual revenue growth over the last five years was slower than its business services peers
- Earnings per share lagged its peers over the last five years as they only grew by 4.3% annually
- Waning returns on capital imply its previous profit engines are losing steam
Zebra is trading at $251.16 per share, or 14.1x forward P/E. Dive into our free research report to see why there are better opportunities than ZBRA.
One Stock to Watch:
Altria (MO)
Trailing 12-Month GAAP Operating Margin: 49.2%
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Are We Positive On MO?
- Unique products and pricing power result in a best-in-class gross margin of 71.1%
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 52.1%
- MO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $67.85 per share, Altria trades at 11.9x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check 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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
