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1 Profitable Stock for Long-Term Investors 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Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. 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:
GoodRx (GDRX)
Trailing 12-Month GAAP Operating Margin: 9.9%
Started in 2011 to tackle the problem of high prescription drug costs in America, GoodRx (NASDAQ:GDRX) operates a digital platform that helps consumers find lower prices on prescription medications through price comparison tools and discount codes.
Why Do We Steer Clear of GDRX?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Modest revenue base of $787.9 million gives it less fixed cost leverage and fewer distribution channels than larger companies
- Negative returns on capital show that some of its growth strategies have backfired
GoodRx is trading at $3.10 per share, or 9.4x forward P/E. If you’re considering GDRX for your portfolio, see our FREE research report to learn more.
The Hanover Insurance Group (THG)
Trailing 12-Month GAAP Operating Margin: 14.8%
Founded in 1852 during a time when fire insurance was crucial for protecting businesses and homes, The Hanover Insurance Group (NYSE:THG) provides property and casualty insurance products through independent agents, serving individuals, small businesses, and mid-sized companies.
Why Does THG Give Us Pause?
- Annual revenue growth of 4.9% over the last two years was below our standards for the insurance sector
- Growth in insurance policies was lackluster over the last two years as its 4.2% annual growth underperformed the typical financial institution
- 3.7% annual book value per share growth over the last five years was slower than its insurance peers
At $206.99 per share, The Hanover Insurance Group trades at 1.9x forward P/B. Dive into our free research report to see why there are better opportunities than THG.
One Stock to Buy:
SEI Investments (SEIC)
Trailing 12-Month GAAP Operating Margin: 27.9%
Founded in 1968 as Simulated Environments Inc. to train bank loan officers using computer simulations, SEI Investments (NASDAQ:SEIC) provides technology platforms, investment management, and operational solutions for financial institutions, wealth managers, and investors.
Why Is SEIC a Good Business?
- 9.9% annual revenue growth over the last two years was better than the sector average, highlighting the value of its products and services
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROE punches in at 26.5%, illustrating management’s expertise in identifying profitable investments
SEI Investments’s stock price of $100.20 implies a valuation ratio of 15.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.