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.
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 balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
Trinity (TRN)
Trailing 12-Month GAAP Operating Margin: 16.8%
Operating under the trade name TrinityRail, Trinity (NYSE:TRN) is a provider of railcar products and services in North America.
Why Are We Out on TRN?
- Sales tumbled by 2.2% annually over the last five years, showing market trends are working against its favor during this cycle
- Sales are projected to tank by 1.6% over the next 12 months as its demand continues evaporating
- 23.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Trinity’s stock price of $26.26 implies a valuation ratio of 3.6x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why TRN doesn’t pass our bar.
Amentum (AMTM)
Trailing 12-Month GAAP Operating Margin: 2.9%
With operations spanning approximately 80 countries and a workforce of specialized engineers and technical experts, Amentum Holdings (NYSE:AMTM) provides advanced engineering and technology solutions to U.S. government agencies, allied governments, and commercial enterprises across defense, energy, and space sectors.
Why Does AMTM Fall Short?
- Annual sales growth of 3.8% over the last two years lagged behind its business services peers as its large revenue base made it difficult to generate incremental demand
- Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
- Low free cash flow margin of 1.9% for the last four years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $22.24 per share, Amentum trades at 9.7x forward P/E. Read our free research report to see why you should think twice about including AMTM in your portfolio.
One Stock to Buy:
Amphenol (APH)
Trailing 12-Month GAAP Operating Margin: 24.3%
With over 90 years of connecting the world's technologies, Amphenol (NYSE:APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
Why Should You Buy APH?
- Annual revenue growth of 29.7% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 40.2% outpaced its revenue gains
- Strong free cash flow margin of 15% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
Amphenol is trading at $139.23 per share, or 37.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - 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 183% over the last five years (as of March 31st 2025).
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-micro-cap company Kadant (+351% 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
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