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".
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 face some trouble.
Two Stocks to Sell:
General Mills (GIS)
Trailing 12-Month GAAP Operating Margin: 21.9%
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE:GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
Why Does GIS Worry Us?
- Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Sales are projected to tank by 3.2% over the next 12 months as demand evaporates further
- Free cash flow margin shrank by 3.1 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
General Mills is trading at $48.05 per share, or 13x forward P/E. Dive into our free research report to see why there are better opportunities than GIS.
Graphic Packaging Holding (GPK)
Trailing 12-Month GAAP Operating Margin: 10.3%
Founded in 1991, Graphic Packaging (NYSE:GPK) is a provider of paper-based packaging solutions for a wide range of products.
Why Do We Pass on GPK?
- Declining unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Sales are projected to be flat over the next 12 months and imply weak demand
- Earnings per share have dipped by 12.8% annually over the past two years, which is concerning because stock prices follow EPS over the long term
At $15.16 per share, Graphic Packaging Holding trades at 8.1x forward P/E. Read our free research report to see why you should think twice about including GPK in your portfolio.
One Stock to Watch:
The Ensign Group (ENSG)
Trailing 12-Month GAAP Operating Margin: 8.3%
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ:ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Why Are We Fans of ENSG?
- Products are seeing elevated demand as its unit sales averaged 11.8% growth over the past two years
- Forecasted revenue growth of 15.5% for the next 12 months indicates its momentum over the last two years is sustainable
- Earnings per share grew by 15.5% annually over the last five years, massively outpacing its peers
The Ensign Group’s stock price of $179.49 implies a valuation ratio of 25.4x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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 6 Stocks for this week. 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 Tecnoglass (+1,754% 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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