1 Profitable Stock with Competitive Advantages and 2 Facing Headwinds

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 leverages its financial strength to beat the competition and two that may struggle to keep up.

Two Stocks to Sell:

Pool (POOL)

Trailing 12-Month GAAP Operating Margin: 11.1%

Founded in 1993 and headquartered in Louisiana, Pool (NASDAQ:POOL) is one of the largest wholesale distributors of swimming pool supplies, equipment, and related leisure products.

Why Are We Out on POOL?

1. Annual revenue growth of 7.5% over the last five years was below our standards for the consumer discretionary sector
2. Free cash flow margin is on track to jump by 1.3 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Pool is trading at $257.76 per share, or 22.7x forward P/E. Dive into our free research report to see why there are better opportunities than POOL.

Enpro (NPO)

Trailing 12-Month GAAP Operating Margin: 15.2%

Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE:NPO) designs, manufactures, and sells products used for machinery in various industries.

Why Do We Think Twice About NPO?

1. Sales were flat over the last five years, indicating it’s failed to expand this cycle
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.7% annually
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Enpro’s stock price of $255.86 implies a valuation ratio of 29.9x forward P/E. If you’re considering NPO for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Core & Main (CNM)

Trailing 12-Month GAAP Operating Margin: 9.4%

Formerly a division of industrial distributor HD Supply, Core & Main (NYSE:CNM) is a provider of water, wastewater, and fire protection products and services.

Why Do We Like CNM?

1. Annual revenue growth of 17% over the last five years was superb and indicates its market share increased during this cycle
2. Share repurchases over the last two years enabled its annual earnings per share growth of 19.1% to outpace its revenue gains
3. Free cash flow margin expanded by 8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

At $56 per share, Core & Main trades at 22.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

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 Kadant (+351% five-year return). Find your next big winner with StockStory today.