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 leverages its financial strength to beat its competitors and two best left off your watchlist.
Two Stocks to Sell:
Entegris (ENTG)
Trailing 12-Month Free Cash Flow Margin: 8.2%
With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Why Should You Dump ENTG?
- Annual sales declines of 7.5% for the past two years show its products and services struggled to connect with the market during this cycle
- Projected sales growth of 2.2% for the next 12 months suggests sluggish demand
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 6.7 percentage points
Entegris’s stock price of $83.55 implies a valuation ratio of 26x forward P/E. Dive into our free research report to see why there are better opportunities than ENTG.
Redfin (RDFN)
Trailing 12-Month Free Cash Flow Margin: 3.9%
Founded by a former medical school student, electrical engineer, and Amazon data engineer, Redfin (NASDAQ: RDFN) is a real estate company offering brokerage services through an online platform.
Why Do We Pass on RDFN?
- Sluggish trends in its brokerage transactions suggest customers aren’t adopting its solutions as quickly as the company hoped
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 9.7% annually
- Negative earnings profile makes it challenging to secure favorable financing terms from lenders
Redfin is trading at $11.30 per share, or 86.7x forward EV-to-EBITDA. If you’re considering RDFN for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Republic Services (RSG)
Trailing 12-Month Free Cash Flow Margin: 15%
Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.
Why Could RSG Be a Winner?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 9.8% annual sales growth over the last five years
- Excellent operating margin of 18.8% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled
- Robust free cash flow margin of 13.5% gives it many options for capital deployment
At $234.90 per share, Republic Services trades at 32.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 6 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-micro-cap company Tecnoglass (+1,754% 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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