1 Profitable Stock for Long-Term Investors and 2 We Brush Off

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".

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 is one profitable company that generates reliable profits without sacrificing growth and two best left off your watchlist.

Two Stocks to Sell:

CONMED (CNMD)

Trailing 12-Month GAAP Operating Margin: 13%

With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE:CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.

Why Are We Wary of CNMD?

1. Smaller revenue base of $1.33 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
2. ROIC of 5.5% reflects management’s challenges in identifying attractive investment opportunities

At $53.83 per share, CONMED trades at 11.9x forward P/E. Read our free research report to see why you should think twice about including CNMD in your portfolio.

Credit Acceptance (CACC)

Trailing 12-Month GAAP Operating Margin: 31.7%

Founded in 1972 by Donald Foss to serve customers overlooked by traditional lenders, Credit Acceptance (NASDAQ:CACC) provides auto financing solutions that enable car dealers to sell vehicles to consumers with limited or impaired credit histories.

Why Is CACC Risky?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Performance over the past two years shows each sale was less profitable, as its earnings per share fell by 10% annually
3. High debt-to-equity ratio of 3.9× shows the firm carries too much debt relative to shareholder equity, increasing bankruptcy risk

Credit Acceptance’s stock price of $513 implies a valuation ratio of 11.9x forward P/E. If you’re considering CACC for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Microsoft (MSFT)

Trailing 12-Month GAAP Operating Margin: 45.6%

Originally named "Micro-soft" for microcomputer software when founded in 1975, Microsoft (NASDAQ:MSFT) is a global technology company that develops software, cloud services, devices, and AI solutions for consumers, businesses, and organizations worldwide.

Why Should You Buy MSFT?

1. Microsoft is one of the great brands not just in tech but all of business. It produces mission-critical software and bundles it together, resulting in cream-of-the-crop gross margins.
2. The company's elite unit economics lead to robust profit margins that improve over time. This speaks to the scale advantages and operating efficiency across its diverse portfolio, which spans everything from Office and Azure to Minecraft.
3. Microsoft has a virtuous cycle of returns. Its dominant market position enables it to generate strong free cash flow, and it reinvests these funds into promising ventures that further strengthen its competitive moat.

Microsoft is trading at $499.49 per share, or 33.4x forward price-to-earnings. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

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 5 Growth Stocks for this month. 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 Kadant (+351% 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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