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 that may face some trouble.

Two Stocks to Sell:

Workday (WDAY)

Trailing 12-Month Free Cash Flow Margin: 26.7%

Born from the vision of PeopleSoft founders after Oracle's hostile takeover of their previous company, Workday (NASDAQ: WDAY) provides cloud-based software for financial management, human resources, planning, and analytics to help organizations manage their business operations.

Why Does WDAY Fall Short?

1. Products, pricing, or go-to-market strategy may need some adjustments as its 13.7% average billings growth over the last year was weak
2. Estimated sales growth of 12.8% for the next 12 months implies demand will slow from its two-year trend
3. Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage

At $234.61 per share, Workday trades at 6.1x forward price-to-sales. If you’re considering WDAY for your portfolio, see our FREE research report to learn more.

Lindsay (LNN)

Trailing 12-Month Free Cash Flow Margin: 13%

A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE: LNN) provides a variety of proprietary water management and road infrastructure products and services.

Why Is LNN Not Exciting?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 4% annually

Lindsay’s stock price of $129.75 implies a valuation ratio of 21.5x forward P/E. Dive into our free research report to see why there are better opportunities than LNN.

One Stock to Buy:

Reddit (RDDT)

Trailing 12-Month Free Cash Flow Margin: 23.8%

Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.

Why Are We Bullish on RDDT?

1. Has the opportunity to boost monetization through new features and premium offerings as its domestic daily active visitors have grown by 33.7% annually over the last two years
2. Earnings per share have massively outperformed its peers over the last three years, increasing by 38.6% annually
3. Free cash flow margin jumped by 35.1 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Reddit is trading at $192.13 per share, or 44.3x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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 Kadant (+351% 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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