1 Profitable Stock with Competitive Advantages and 2 We Find Risky

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, here is one profitable company that generates reliable profits without sacrificing growth and two that may face some trouble.

Two Stocks to Sell:

Constellation Brands (STZ)

Trailing 12-Month GAAP Operating Margin: 22.7%

With a presence in more than 100 countries, Constellation Brands (NYSE:STZ) is a globally renowned producer and marketer of beer, wine, and spirits.

Why Are We Wary of STZ?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Estimated sales decline of 3.3% for the next 12 months implies an even more challenging demand environment
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up

Constellation Brands’s stock price of $148.13 implies a valuation ratio of 12.3x forward P/E. If you’re considering STZ for your portfolio, see our FREE research report to learn more.

Garrett Motion (GTX)

Trailing 12-Month GAAP Operating Margin: 14.2%

A key player in the transition to cleaner vehicles, Garrett Motion (NYSE:GTX) designs and manufactures turbochargers, air compressors, and electric motor technologies for vehicle manufacturers and industrial applications.

Why Are We Hesitant About GTX?

1. Sales tumbled by 4% annually over the last two years, showing market trends are working against its favor during this cycle
2. Sales are projected to be flat over the next 12 months and imply weak demand
3. Earnings per share fell by 12.7% annually over the last five years while its revenue grew, partly because it diluted shareholders

At $18.12 per share, Garrett Motion trades at 10.7x forward P/E. To fully understand why you should be careful with GTX, check out our full research report (it’s free).

One Stock to Watch:

ITT (ITT)

Trailing 12-Month GAAP Operating Margin: 17.5%

Playing a crucial role in the development of the first transatlantic television transmission in 1956, ITT (NYSE:ITT) provides motion and fluid handling equipment for various industries

Why Could ITT Be a Winner?

1. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 17.5%
2. Free cash flow margin grew by 17.4 percentage points over the last five years, giving the company more chips to play with
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

ITT is trading at $182.04 per share, or 24.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.