Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here are two profitable companies that balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
Barrett (BBSI)
Trailing 12-Month GAAP Operating Margin: 4.1%
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Why Do We Think Twice About BBSI?
- Flat earnings per share over the last two years underperformed the sector average
- Poor free cash flow margin of 0% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Waning returns on capital imply its previous profit engines are losing steam
Barrett is trading at $33.01 per share, or 0.6x forward price-to-sales. To fully understand why you should be careful with BBSI, check out our full research report (it’s free).
Two Stocks to Watch:
American Superconductor (AMSC)
Trailing 12-Month GAAP Operating Margin: 4.3%
Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
What Makes AMSC Stand Out?
- Annual revenue growth of 43.6% over the last two years was superb and indicates its market share increased during this cycle
- Free cash flow margin grew by 25.5 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
American Superconductor’s stock price of $31.76 implies a valuation ratio of 31.4x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Brink's (BCO)
Trailing 12-Month GAAP Operating Margin: 10.3%
Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE:BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.
Why Does BCO Stand Out?
- Revenue base of $5.48 billion gives it economies of scale and some distribution advantages
- Share repurchases over the last five years enabled its annual earnings per share growth of 13.7% to outpace its revenue gains
- Rising returns on capital show management is finding more attractive investment opportunities
At $114.56 per share, Brink's trades at 11.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.