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".
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist.
Two Stocks to Sell:
Universal Logistics (ULH)
Trailing 12-Month GAAP Operating Margin: 4.6%
Founded in 1932, Universal Logistics (NASDAQ:ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.
Why Do We Steer Clear of ULH?
- Annual sales declines of 2.7% for the past two years show its products and services struggled to connect with the market during this cycle
- Investment activity picked up over the last five years, pressuring its weak free cash flow margin of -0.9%
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Universal Logistics’s stock price of $15.38 implies a valuation ratio of 23x forward P/E. Check out our free in-depth research report to learn more about why ULH doesn’t pass our bar.
Amneal (AMRX)
Trailing 12-Month GAAP Operating Margin: 12.2%
Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ:AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.
Why Does AMRX Give Us Pause?
- Free cash flow margin dropped by 1.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $12.60 per share, Amneal trades at 15x forward P/E. If you’re considering AMRX for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
EMCOR (EME)
Trailing 12-Month GAAP Operating Margin: 9.4%
Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services
Why Should You Buy EME?
- Annual revenue growth of 15.9% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 47.4% exceeded its revenue gains over the last two years
- Returns on capital are climbing as management makes more lucrative bets
EMCOR is trading at $642.29 per share, or 22.7x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.