A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.
Two Stocks to Sell:
Campbell's (CPB)
Trailing 12-Month Free Cash Flow Margin: 6.8%
With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ:CPB) is a packaged food company with an illustrious portfolio of brands.
Why Do We Avoid CPB?
- Flat unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Sales are projected to tank by 2.4% over the next 12 months as demand evaporates
- Earnings per share fell by 1.3% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable
Campbell’s stock price of $27.15 implies a valuation ratio of 11x forward P/E. If you’re considering CPB for your portfolio, see our FREE research report to learn more.
Masco (MAS)
Trailing 12-Month Free Cash Flow Margin: 11.1%
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Is MAS Risky?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Projected sales growth of 2% for the next 12 months suggests sluggish demand
- Eroding returns on capital suggest its historical profit centers are aging
At $66.20 per share, Masco trades at 16.3x forward P/E. Read our free research report to see why you should think twice about including MAS in your portfolio.
One Stock to Watch:
Veeva Systems (VEEV)
Trailing 12-Month Free Cash Flow Margin: 43.9%
Originally named "Verticals onDemand" before rebranding in 2009, Veeva Systems (NYSE:VEEV) provides cloud software, data solutions, and consulting services that help life sciences companies develop and bring products to market more efficiently.
Why Are We Positive On VEEV?
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Healthy operating margin of 27.9% shows it’s a well-run company with efficient processes, and its rise over the last year was fueled by some leverage on its fixed costs
- Strong free cash flow margin of 43.9% enables it to reinvest or return capital consistently
Veeva Systems is trading at $209.81 per share, or 10.7x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.