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.

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 balances growth and profitability and two that may face some trouble.

Two Stocks to Sell:

Pool (POOL)

Trailing 12-Month GAAP Operating Margin: 11%

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 Should You Sell POOL?

1. Sales trends were unexciting over the last five years as its 6.1% annual growth was below the typical consumer discretionary company
2. Free cash flow margin is forecasted to grow by 1.6 percentage points in the coming year, potentially giving the company more chips to play with
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Pool’s stock price of $215.19 implies a valuation ratio of 19.4x forward P/E. Read our free research report to see why you should think twice about including POOL in your portfolio.

Halliburton (HAL)

Trailing 12-Month GAAP Operating Margin: 10.2%

Behind nearly every oil and gas well drilled worldwide, Halliburton (NYSE: HAL) provides drilling, completion, and production services that help oil and gas companies extract hydrocarbons from underground reservoirs.

Why Do We Think Twice About HAL?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 9% for the last five years
2. High extraction costs and unfavorable asset economics are reflected in its low gross margin of 16.8%

Halliburton is trading at $37.63 per share, or 17.2x forward P/E. To fully understand why you should be careful with HAL, check out our full research report (it’s free).

One Stock to Buy:

Eli Lilly (LLY)

Trailing 12-Month GAAP Operating Margin: 40.4%

Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.

Why Are We Backing LLY?

1. Annual revenue growth of 38.2% over the past two years was outstanding, reflecting market share gains this cycle
2. Adjusted operating profits and efficiency rose over the last two years as it benefited from some fixed cost leverage
3. Share buybacks catapulted its annual earnings per share growth to 25%, which outperformed its revenue gains over the last five years

At $940.50 per share, Eli Lilly trades at 27.6x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.