1 Profitable Stock to Target This Week and 2 Facing Challenges

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist.

Two Stocks to Sell:

Douglas Dynamics (PLOW)

Trailing 12-Month GAAP Operating Margin: 9.7%

Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.

Why Should You Sell PLOW?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 2.7% annually over the last two years
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 3.8 percentage points
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 4.2 percentage points

At $31.69 per share, Douglas Dynamics trades at 15.2x forward P/E. Check out our free in-depth research report to learn more about why PLOW doesn’t pass our bar.

Quest (DGX)

Trailing 12-Month GAAP Operating Margin: 14.1%

Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE:DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.

Why Are We Hesitant About DGX?

1. Sizable revenue base leads to growth challenges as its 5.3% annual revenue increases over the last five years fell short of other healthcare companies
2. Efficiency has decreased over the last five years as its adjusted operating margin fell by 9.7 percentage points
3. Waning returns on capital imply its previous profit engines are losing steam

Quest’s stock price of $182.82 implies a valuation ratio of 18x forward P/E. If you’re considering DGX for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

VSE Corporation (VSEC)

Trailing 12-Month GAAP Operating Margin: 8.9%

With roots dating back to 1959 and a strategic focus on extending the life of transportation assets, VSE Corporation (NASDAQ:VSEC) provides aftermarket parts distribution and maintenance, repair, and overhaul services for aircraft and vehicle fleets in commercial and government markets.

Why Do We Watch VSEC?

1. Annual revenue growth of 16.7% over the past two years was outstanding, reflecting market share gains this cycle
2. Operating margin improvement of 5.4 percentage points over the last five years demonstrates its ability to scale efficiently
3. Performance over the past five years shows its incremental sales were more profitable, as its annual earnings per share growth of 14.2% outpaced its revenue gains

VSE Corporation is trading at $181.05 per share, or 46.3x 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

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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 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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