1 Profitable Stock to Keep an Eye On and 2 to Brush Off
A company with profits isn't always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
Not all profitable companies are created equal, and that's why we built StockStory - to help you find the ones that truly shine bright. That said, here is one profitable company that balances growth and profitability and two that may face some trouble.
Trailing 12-Month GAAP Operating Margin: 1.9%
Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices
Why Should You Sell KLIC?
Annual sales declines of 17.2% for the past two years show its products and services struggled to connect with the market during this cycle
Sales are projected to tank by 8.8% over the next 12 months as its demand continues evaporating
Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 16.4 percentage points
Kulicke and Soffa is trading at $34.25 per share, or 20.3x forward P/E. Read our free research report to see why you should think twice about including KLIC in your portfolio, it's free.
Trailing 12-Month GAAP Operating Margin: 13.4%
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ:GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Why Are We Out on GLDD?
Annual revenue growth of 1.8% over the last five years was below our standards for the industrials sector
Free cash flow margin dropped by 16.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Diminishing returns on capital from an already low starting point show that neither management's prior nor current bets are going as planned
At $11.50 per share, Great Lakes Dredge & Dock trades at 16.1x forward P/E. To fully understand why you should be careful with GLDD, check out our full research report (it's free).
Trailing 12-Month GAAP Operating Margin: 13.9%
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ:COCO) offers coconut water products that are a natural way to quench thirst.
Why Is COCO on Our Radar?
Stellar 8.4% growth in unit sales over the past two years demonstrates the high demand for its products
Earnings growth has trumped its peers over the last three years as its EPS has compounded at 46.9% annually
Industry-leading 33.4% return on capital demonstrates management's skill in finding high-return investments, and its returns are growing as it capitalizes on even better market opportunities
Vita Coco's stock price of $33.25 implies a valuation ratio of 27.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it's free.
Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free.
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