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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here is one profitable company that leverages its financial strength to beat the competition and two that may struggle to keep up.
Two Stocks to Sell:
Masco (MAS)
Trailing 12-Month GAAP Operating Margin: 17.6%
Headquartered just outside of Detroit, MI, Masco (NYSE: MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Do We Think MAS Will Underperform?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Projected sales growth of 1.3% for the next 12 months suggests sluggish demand
- Eroding returns on capital suggest its historical profit centers are aging
At $70.75 per share, Masco trades at 19.1x forward P/E. Read our free research report to see why you should think twice about including MAS in your portfolio.
Enphase (ENPH)
Trailing 12-Month GAAP Operating Margin: 11.7%
The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ: ENPH) manufactures software-driven home energy products.
Why Does ENPH Fall Short?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 12 percentage points
- Earnings per share have contracted by 27.3% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Enphase is trading at $35.32 per share, or 14.2x forward P/E. If you’re considering ENPH for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Coherent (COHR)
Trailing 12-Month GAAP Operating Margin: 5%
Created through the 2022 rebranding of II-VI Incorporated, a company with roots dating back to 1971, Coherent (NYSE: COHR) develops and manufactures advanced materials, lasers, and optical components for applications ranging from telecommunications to industrial manufacturing.
Why Does COHR Stand Out?
- Market share has increased this cycle as its 19.5% annual revenue growth over the last five years was exceptional
- Economies of scale give it some operating leverage when demand rises
- Sales outlook for the upcoming 12 months calls for 8.7% growth, an acceleration from its two-year trend
Coherent’s stock price of $107.30 implies a valuation ratio of 23.5x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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.
