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. 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:
Parker-Hannifin (PH)
Trailing 12-Month GAAP Operating Margin: 20.5%
Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.
Why Is PH Not Exciting?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2% for the last two years
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.9%
Parker-Hannifin’s stock price of $753.24 implies a valuation ratio of 25.9x forward P/E. To fully understand why you should be careful with PH, check out our full research report (it’s free).
Moog (MOG.A)
Trailing 12-Month GAAP Operating Margin: 9.1%
Responsible for the flight control actuation system integrated in the B-2 stealth bomber, Moog (NYSE: MOG.A) provides precision motion control solutions used in aerospace and defense applications
Why Are We Cautious About MOG.A?
- Muted 4.9% annual revenue growth over the last five years shows its demand lagged behind its industrials peers
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.6 percentage points
- ROIC of 8.4% reflects management’s challenges in identifying attractive investment opportunities
Moog is trading at $205.33 per share, or 21.8x forward P/E. Check out our free in-depth research report to learn more about why MOG.A doesn’t pass our bar.
One Stock to Buy:
Moody's (MCO)
Trailing 12-Month GAAP Operating Margin: 40.6%
Founded in 1900 during America's railroad boom when investors needed reliable information on bond risks, Moody's (NYSE: MCO) provides credit ratings, risk assessment tools, and analytical solutions that help organizations evaluate financial risks and make informed investment decisions.
Why Are We Bullish on MCO?
- Market share has increased this cycle as its 15% annual revenue growth over the last two years was exceptional
- Share buybacks catapulted its annual earnings per share growth to 23%, which outperformed its revenue gains over the last two years
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $482 per share, Moody's trades at 32.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 9 Market-Beating Stocks. 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-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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
