Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. That said, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist.
Two Stocks to Sell:
Hexcel (HXL)
Trailing 12-Month GAAP Operating Margin: 9.5%
Founded shortly after World War II by a group of engineers from UC Berkley, Hexcel (NYSE: HXL) manufactures lightweight composite materials primarily for the aerospace and defense sectors.
Why Does HXL Give Us Pause?
- Muted 3.7% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 6.4% annually
- Underwhelming 6.9% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $96.66 per share, Hexcel trades at 38.8x forward P/E. If you’re considering HXL for your portfolio, see our FREE research report to learn more.
Viavi Solutions (VIAV)
Trailing 12-Month GAAP Operating Margin: 4.3%
Once known as JDS Uniphase before its 2015 rebranding, Viavi Solutions (NASDAQ: VIAV) provides testing, monitoring and assurance solutions for telecommunications, cloud, enterprise, military, and other critical networks and infrastructure.
Why Are We Cautious About VIAV?
- Sales trends were unexciting over the last five years as its 3.4% annual growth was below the typical industrials company
- Performance over the past five years shows its incremental sales were less profitable as its earnings per share were flat
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Viavi Solutions’s stock price of $50.88 implies a valuation ratio of 38.2x forward P/E. To fully understand why you should be careful with VIAV, check out our full research report (it’s free).
One Stock to Buy:
Corpay (CPAY)
Trailing 12-Month GAAP Operating Margin: 46.1%
Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE: CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.
Why Should You Buy CPAY?
- Annual revenue growth of 15.4% over the past five years was outstanding, reflecting market share gains this cycle
- Earnings per share grew by 15.8% annually over the last five years and topped the peer group average
- Industry-leading 31.7% return on equity demonstrates management’s skill in finding high-return investments
Corpay is trading at $351.03 per share, or 12.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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.
