Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, 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:
Warner Bros. Discovery (WBD)
Trailing 12-Month GAAP Operating Margin: 1.5%
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ: WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Is WBD Risky?
- Annual sales declines of 5.1% for the past two years show its products and services struggled to connect with the market
- Free cash flow margin is projected to show no improvement next year
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Warner Bros. Discovery is trading at $28.83 per share, or 11.6x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including WBD in your portfolio.
MYR Group (MYRG)
Trailing 12-Month GAAP Operating Margin: 4.3%
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ: MYRG) is a specialty contractor in the electrical construction industry.
Why Does MYRG Worry Us?
- Backlog has dropped by 4.3% on average over the past two years, suggesting it’s losing orders as competition picks up
- Gross margin of 10.8% reflects its high production costs
- Eroding returns on capital suggest its historical profit centers are aging
MYR Group’s stock price of $218.54 implies a valuation ratio of 25.7x forward P/E. To fully understand why you should be careful with MYRG, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
BGC (BGC)
Trailing 12-Month GAAP Operating Margin: 6.3%
Tracing its roots back to 1945 and named after founder Bernard Gerald Cantor, BGC Group (NASDAQ: BGC) operates a global brokerage and financial technology platform that facilitates trading across fixed income, foreign exchange, equities, energy, and commodities markets.
Why Could BGC Be a Winner?
- Market share has increased this cycle as its 18.7% annual revenue growth over the last two years was exceptional
- Performance over the past two years shows its incremental sales were more profitable, as its annual earnings per share growth of 20.9% outpaced its revenue gains
- Management team has demonstrated it can invest in profitable ventures through its 11.2% five-year return on equity
At $8.92 per share, BGC trades at 6.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
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-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.
