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:
Conagra (CAG)
Trailing 12-Month GAAP Operating Margin: 2.8%
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE: CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Do We Think CAG Will Underperform?
- Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable
Conagra is trading at $17.85 per share, or 10x forward P/E. To fully understand why you should be careful with CAG, check out our full research report (it’s free).
Verisk (VRSK)
Trailing 12-Month GAAP Operating Margin: 44.4%
Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ: VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.
Why Is VRSK Not Exciting?
- Muted 2% annual revenue growth over the last five years shows its demand lagged behind its business services peers
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 7.2% annually
At $216.63 per share, Verisk trades at 29.7x forward P/E. Read our free research report to see why you should think twice about including VRSK in your portfolio.
One Stock to Buy:
Nubank (NU)
Trailing 12-Month GAAP Operating Margin: 12.4%
With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE: NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.
Why Are We Bullish on NU?
- Market share has increased this cycle as its 41.1% annual revenue growth over the last two years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 72.8% over the last two years outstripped its revenue performance
Nubank’s stock price of $18.84 implies a valuation ratio of 21.9x 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
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
