13 Signs You Should Sell That Stock—Now

2. Eroding Profit Margins

Profit margins are a key indicator of a company's financial health and operational efficiency. When these margins start to erode, it can suggest rising costs or pricing pressures that the company cannot offset. This erosion might stem from increased production costs, higher labor expenses, or aggressive pricing strategies by competitors. Investors should scrutinize the company's cost structure and pricing strategies to understand the root causes. A continuous decline in profit margins without a clear plan for improvement often warrants a reevaluation of the stock.