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 are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Atkore (ATKR)
Trailing 12-Month GAAP Operating Margin: 1.3%
Protecting the things that power our world, Atkore (NYSE: ATKR) designs and manufactures electrical safety products.
Why Do We Think ATKR Will Underperform?
- Annual sales declines of 5.5% for the past two years show its products and services struggled to connect with the market during this cycle
- Free cash flow margin dropped by 11.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital suggest its earlier profit pools are drying up
Atkore’s stock price of $94.42 implies a valuation ratio of 15.3x forward P/E. Read our free research report to see why you should think twice about including ATKR in your portfolio.
Two Stocks to Watch:
Avnet (AVT)
Trailing 12-Month GAAP Operating Margin: 3.1%
With a century-long history of adapting to technological evolution, Avnet (NASDAQ: AVT) is a global electronic components distributor that connects manufacturers of semiconductors and other electronic parts with businesses that need these components.
Why Are We Positive on AVT?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 7.8% annual sales growth over the last two years
- Dominant market position is represented by its $27.63 billion in revenue and gives it fixed cost leverage when sales grow
- Share buybacks catapulted its annual earnings per share growth to 15.9%, which outperformed its revenue gains over the last five years
At $97.58 per share, Avnet trades at 8.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Shift4 (FOUR)
Trailing 12-Month GAAP Operating Margin: 8.1%
Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE: FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.
Why Are We Bullish on FOUR?
- Market share has increased this cycle as its 28.1% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 31.9% annual growth in its earnings per share outpaced its revenue
- Industry-leading 16.1% return on equity demonstrates management’s skill in finding high-return investments
Shift4 is trading at $39.18 per share, or 7.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
