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".

Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here is one profitable company that generates reliable profits without sacrificing growth and two that may face some trouble.

Two Stocks to Sell:

KB Home (KBH)

Trailing 12-Month GAAP Operating Margin: 10.4%

The first homebuilder to be listed on the NYSE, KB Home (NYSE: KB) is a homebuilding company targeting the first-time home buyer and move-up buyer markets.

Why Do We Steer Clear of KBH?

1. Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 20.8% declines over the past two years
2. Sales are projected to tank by 10.4% over the next 12 months as its demand continues evaporating
3. Sales were less profitable over the last two years as its earnings per share fell by 7.5% annually, worse than its revenue declines

KB Home is trading at $67.98 per share, or 9.7x forward P/E. Check out our free in-depth research report to learn more about why KBH doesn’t pass our bar.

Selective Insurance Group (SIGI)

Trailing 12-Month GAAP Operating Margin: 17.6%

Founded in 1926 during the early days of automobile insurance, Selective Insurance Group (NASDAQ: SIGI) is a property and casualty insurance company that sells commercial, personal, and excess and surplus lines insurance products through independent agents.

Why Should You Sell SIGI?

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 expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 11.7% annually

Selective Insurance Group’s stock price of $82.06 implies a valuation ratio of 1.5x forward P/B. If you’re considering SIGI for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Altria (MO)

Trailing 12-Month GAAP Operating Margin: 54.6%

Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.

Why Could MO Be a Winner?

1. Differentiated product offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 70.7%
2. Healthy operating margin of 54.6% shows it’s a well-run company with efficient processes
3. Robust free cash flow margin of 43.3% gives it many options for capital deployment

At $66.58 per share, Altria trades at 12x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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