Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
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 leverages its financial strength to beat the competition and two that may face some trouble.
Two Stocks to Sell:
ArcBest (ARCB)
Trailing 12-Month GAAP Operating Margin: 3.4%
Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ: ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.
Why Do We Think ARCB Will Underperform?
- Flat unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 23.1% annually, worse than its revenue
- Eroding returns on capital suggest its historical profit centers are aging
At $91.48 per share, ArcBest trades at 23.9x forward P/E. Dive into our free research report to see why there are better opportunities than ARCB.
Zimmer Biomet (ZBH)
Trailing 12-Month GAAP Operating Margin: 16.6%
With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE: ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.
Why Does ZBH Worry Us?
- 3% annual revenue growth over the last five years was slower than its healthcare peers
- Free cash flow margin shrank by 1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Underwhelming 4.2% return on capital reflects management’s difficulties in finding profitable growth opportunities
Zimmer Biomet is trading at $88.06 per share, or 10.7x forward P/E. Check out our free in-depth research report to learn more about why ZBH doesn’t pass our bar.
One Stock to Watch:
AAR (AIR)
Trailing 12-Month GAAP Operating Margin: 9.3%
The first third-party MRO approved by the FAA for Safety Management System Requirements, AAR (NYSE: AIR) is a provider of aircraft maintenance services
Why Are We Positive On AIR?
- Market share has increased this cycle as its 17% annual revenue growth over the last two years was exceptional
- Market share will likely rise over the next 12 months as its expected revenue growth of 15.6% is robust
- Earnings per share grew by 17.9% annually over the last two years and trumped its peers
AAR’s stock price of $106.15 implies a valuation ratio of 19.8x 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
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. 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.
