A company with profits isn’t always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.

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 leverages its financial strength to beat the competition and two best left off your watchlist.

Two Stocks to Sell:

Calavo (CVGW)

Trailing 12-Month GAAP Operating Margin: 3.6%

A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.

Why Are We Hesitant About CVGW?

1. Annual sales declines of 14.7% for the past three years show its products struggled to connect with the market

2. Smaller revenue base of $688.3 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy

3. Gross margin of 10.6% is below its competitors, leaving less money to invest in areas like marketing and production facilities

Calavo is trading at $26.82 per share, or 16x forward price-to-earnings. To fully understand why you should be careful with CVGW, check out our full research report (it’s free) .

J. M. Smucker (SJM)

Trailing 12-Month GAAP Operating Margin: 3.8%

Best known for its fruit jams and spreads, J.M Smucker (NYSE:SJM) is a packaged foods company whose products span from peanut butter and coffee to pet food.

Why Does SJM Fall Short?

1. Muted 3.7% annual revenue growth over the last three years shows its demand lagged behind its consumer staples peers

2. Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend

3. Underwhelming 4.1% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

At $116.98 per share, J. M. Smucker trades at 11.4x forward price-to-earnings. If you’re considering SJM for your portfolio, see our FREE research report to learn more .

One Stock to Buy:

FTAI Aviation (FTAI)

Trailing 12-Month GAAP Operating Margin: 12.6%

With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.

Why Will FTAI Outperform?

1. Annual revenue growth of 56.5% over the past two years was outstanding, reflecting market share gains this cycle

2. Additional sales over the last two years increased its profitability as the 102% annual growth in its earnings per share outpaced its revenue

3. Cash-burning tendencies have improved over the last five years, showing it could become financially independent one day