While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
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 balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
CooperCompanies (COO)
Trailing 12-Month GAAP Operating Margin: 18.3%
With a history dating back to 1958 and a portfolio spanning two distinct healthcare segments, Cooper Companies (NASDAQ: COO) develops and manufactures medical devices focused on vision care through contact lenses and women's health including fertility products and services.
Why Are We Cautious About COO?
- 7.3% annual revenue growth over the last two years was slower than its healthcare peers
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 8.3 percentage points
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
CooperCompanies’s stock price of $77.92 implies a valuation ratio of 18.1x forward P/E. Check out our free in-depth research report to learn more about why COO doesn’t pass our bar.
FactSet (FDS)
Trailing 12-Month GAAP Operating Margin: 32.2%
Founded in 1978 when financial data was still primarily delivered through paper reports, FactSet (NYSE: FDS) provides financial data, analytics, and technology solutions that investment professionals use to research, analyze, and manage their portfolios.
Why Are We Wary of FDS?
- Sales trends were unexciting over the last two years as its 5.5% annual growth was below the typical financials company
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 8.1% annually
FactSet is trading at $276.76 per share, or 16x forward P/E. To fully understand why you should be careful with FDS, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Hamilton Lane (HLNE)
Trailing 12-Month GAAP Operating Margin: 43.2%
With over $100 billion in assets under management and supervision, Hamilton Lane (NASDAQ: HLNE) is an investment management firm that specializes in private markets, offering advisory services and fund solutions to institutional and private wealth investors.
Why Is HLNE a Good Business?
- Annual revenue growth of 22.1% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 28.4% annually, topping its revenue gains
- Industry-leading 38% return on equity demonstrates management’s skill in finding high-return investments
At $123.94 per share, Hamilton Lane trades at 22.2x forward P/E. 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
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our 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 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-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
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