Nasdaq
華爾街日報1 Profitable Stock to Keep an Eye On and 2 That Underwhelm
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. That said, here is one profitable company that generates reliable profits without sacrificing growth and two best left off your watchlist.
Two Stocks to Sell:
Himax (HIMX)
Trailing 12-Month GAAP Operating Margin: 7%
Taiwan-based Himax Technologies (NASDAQ:HIMX) is a leading manufacturer of display driver chips and timing controllers used in TVs, laptops, and mobile phones.
Why Do We Steer Clear of HIMX?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6% annually over the last two years
- Sales are projected to tank by 4.4% over the next 12 months as its demand continues evaporating
- Efficiency has decreased over the last five years as its operating margin fell by 22.9 percentage points
At $8.25 per share, Himax trades at 55x forward P/E. Read our free research report to see why you should think twice about including HIMX in your portfolio.
GXO Logistics (GXO)
Trailing 12-Month GAAP Operating Margin: 2%
With notable customers such as Nike and Apple, GXO (NYSE:GXO) manages outsourced supply chains and warehousing for various companies.
Why Does GXO Worry Us?
- Earnings per share have contracted by 1.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Low returns on capital reflect management’s struggle to allocate funds effectively
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
GXO Logistics’s stock price of $53.03 implies a valuation ratio of 18.3x forward P/E. To fully understand why you should be careful with GXO, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Acuity Brands (AYI)
Trailing 12-Month GAAP Operating Margin: 13%
One of the pioneers of smart lights, Acuity (NYSE:AYI) designs and manufactures light fixtures and building management systems used in various industries.
Why Could AYI Be a Winner?
- Superior product capabilities and pricing power lead to a top-tier gross margin of 44.5%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 16.9% exceeded its revenue gains over the last five years
- Industry-leading 16.6% return on capital demonstrates management’s skill in finding high-return investments
Acuity Brands is trading at $372 per share, or 18.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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 Comfort Systems (+782% 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.