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 generates reliable profits without sacrificing growth and two that may face some trouble.
Two Stocks to Sell:
Tutor Perini (TPC)
Trailing 12-Month GAAP Operating Margin: 1.9%
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE:TPC) is a civil and building construction company offering diversified general contracting and design-build services.
Why Does TPC Fall Short?
- Sales stagnated over the last five years and signal the need for new growth strategies
- High input costs result in an inferior gross margin of 6.7% that must be offset through higher volumes
- Earnings per share fell by 18.8% annually over the last five years while its revenue was flat, partly because it diluted shareholders
Tutor Perini is trading at $64.01 per share, or 14.7x forward P/E. To fully understand why you should be careful with TPC, check out our full research report (it’s free for active Edge members).
MGIC Investment (MTG)
Trailing 12-Month GAAP Operating Margin: 78.1%
Founded in 1957 when the modern mortgage insurance industry was in its infancy, MGIC Investment (NYSE:MTG) provides private mortgage insurance that protects lenders when homebuyers default on their loans, enabling borrowers to purchase homes with smaller down payments.
Why Does MTG Worry Us?
- Insurance policy sales contracted this cycle as net premiums earned decreased by 1.1% annually over the last five years
- Projected sales growth of 2.3% for the next 12 months suggests sluggish demand
- Earnings per share lagged its peers over the last two years as they only grew by 11.7% annually
MGIC Investment’s stock price of $28.29 implies a valuation ratio of 1.2x forward P/B. Read our free research report to see why you should think twice about including MTG in your portfolio.
One Stock to Watch:
RLI (RLI)
Trailing 12-Month GAAP Operating Margin: 25.1%
Founded in 1965 and named after its original focus on "replacement lens insurance" for contact lens wearers, RLI (NYSE:RLI) is a specialty insurance company that underwrites property, casualty, and surety products through wholesale brokers, independent agents, and carrier partnerships.
Why Is RLI on Our Radar?
- Market share has increased this cycle as its 14.5% annual revenue growth over the last five years was exceptional
- Market penetration was impressive this cycle as its net premiums earned expanded by 13.3% annually over the last two years
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $61.74 per share, RLI trades at 3.1x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
Don’t let fear keep you from great opportunities and take a look at 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 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-micro-cap company Tecnoglass (+1,754% 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.