Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
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 generates reliable profits without sacrificing growth and two that may face some trouble.
Two Stocks to Sell:
Oxford Industries (OXM)
Trailing 12-Month GAAP Operating Margin: 5.1%
The parent company of Tommy Bahama, Oxford Industries (NYSE:OXM) is a lifestyle fashion conglomerate with brands that embody outdoor happiness.
Why Are We Out on OXM?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its stores
- Projected sales growth of 1.4% for the next 12 months suggests sluggish demand
- Diminishing returns on capital suggest its earlier profit pools are drying up
Oxford Industries is trading at $31.90 per share, or 9.7x forward P/E. If you’re considering OXM for your portfolio, see our FREE research report to learn more.
Ameresco (AMRC)
Trailing 12-Month GAAP Operating Margin: 6.8%
Having played a role in upgrading the energy solutions of Alcatraz Island, Ameresco (NYSE:AMRC) provides energy and renewable energy solutions for various sectors.
Why Are We Cautious About AMRC?
- Gross margin of 16.5% reflects its high production costs
- Negative free cash flow raises questions about the return timeline for its investments
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
At $31.18 per share, Ameresco trades at 32.3x forward P/E. Read our free research report to see why you should think twice about including AMRC in your portfolio.
One Stock to Watch:
Energy Recovery (ERII)
Trailing 12-Month GAAP Operating Margin: 15.7%
Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ:ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors.
Why Do We Like ERII?
- Offerings are difficult to replicate at scale and result in a best-in-class gross margin of 67.6%
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin grew by 6.3 percentage points over the last five years, giving the company more chips to play with
Energy Recovery’s stock price of $13.31 implies a valuation ratio of 15.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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 Comfort Systems (+782% 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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