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2 Profitable Stocks with Promising Prospects and 1 Facing Challenges
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".
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Clorox (CLX)
Trailing 12-Month GAAP Operating Margin: 14.9%
Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.
Why Does CLX Give Us Pause?
- Annual revenue declines of 1.3% over the last three years indicate problems with its market positioning
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
Clorox is trading at $101.17 per share, or 15.7x forward P/E. Dive into our free research report to see why there are better opportunities than CLX.
Two Stocks to Watch:
PJT (PJT)
Trailing 12-Month GAAP Operating Margin: 19.5%
Spun off from Blackstone in 2015 and founded by former Morgan Stanley executive Paul J. Taubman, PJT Partners (NYSE:PJT) is an advisory-focused investment bank that provides strategic advice, restructuring services, and fundraising solutions to corporations, boards, and investment firms.
Why Do We Watch PJT?
- Market share has increased this cycle as its 22.4% annual revenue growth over the last two years was exceptional
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 36.8% annually, topping its revenue gains
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
PJT’s stock price of $167.19 implies a valuation ratio of 23.3x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
HCI Group (HCI)
Trailing 12-Month GAAP Operating Margin: 35.7%
Starting as a Florida "take-out" insurer that assumed policies from the state-backed Citizens Property Insurance Corporation, HCI Group (NYSE:HCI) provides property and casualty insurance, primarily homeowners coverage, while leveraging proprietary technology to improve underwriting and claims processing.
Why Should You Buy HCI?
- Strong 28% annualized net premiums earned expansion over the last two years shows it’s capturing market share this cycle
- Impressive 65.1% annual book value per share growth over the last two years indicates it’s building equity value this cycle
- Book value per share outlook for the upcoming 12 months is outstanding and shows it’s on track to build significant equity value
At $190.48 per share, HCI Group trades at 2.6x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
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 Growth Stocks for this month. 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.