A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. 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:
NVR (NVR)
Trailing 12-Month Free Cash Flow Margin: 11.4%
Known for its unique land acquisition strategy, NVR (NYSE: NVR) is a respected homebuilder and mortgage company in the United States.
Why Are We Wary of NVR?
- Sales pipeline suggests its future revenue growth may not meet our standards as its average backlog growth of 1.3% for the past two years was weak
- Forecasted revenue decline of 6.9% for the upcoming 12 months implies demand will fall off a cliff
- Waning returns on capital imply its previous profit engines are losing steam
NVR is trading at $7,585 per share, or 17.5x forward P/E. If you’re considering NVR for your portfolio, see our FREE research report to learn more.
Xerox (XRX)
Trailing 12-Month Free Cash Flow Margin: 4.9%
Pioneering the modern office copier and inventing technologies like Ethernet and the laser printer, Xerox (NASDAQ: XRX) provides document management systems, printing technology, and workplace solutions to businesses of all sizes across the globe.
Why Do We Steer Clear of XRX?
- Sales tumbled by 4.9% annually over the last five years, showing market trends are working against its favor during this cycle
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
- 8× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $3.31 per share, Xerox trades at 3.5x forward P/E. Dive into our free research report to see why there are better opportunities than XRX.
One Stock to Buy:
Zeta Global (ZETA)
Trailing 12-Month Free Cash Flow Margin: 10.3%
Powered by an AI engine that processes over one trillion consumer signals monthly, Zeta Global (NYSE: ZETA) operates a data-driven cloud platform that helps companies target, connect, and engage with consumers through personalized marketing across channels like email, social media, and video.
Why Do We Love ZETA?
- Billings have averaged 40.6% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
Zeta Global’s stock price of $19.05 implies a valuation ratio of 3x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
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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