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 reinvests wisely to drive long-term success and two that may face some trouble.
Two Stocks to Sell:
BlackLine (BL)
Trailing 12-Month Free Cash Flow Margin: 21.3%
Born from the vision to eliminate tedious manual spreadsheet work for accountants, BlackLine (NASDAQ: BL) provides cloud-based software that automates and streamlines financial close, intercompany accounting, and invoice-to-cash processes for accounting departments.
Why Is BL Not Exciting?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 7.2% underwhelmed
- Estimated sales growth of 8.3% for the next 12 months implies demand will slow from its two-year trend
- Operating margin improvement of 1.3 percentage points over the last year demonstrates its ability to scale efficiently
BlackLine’s stock price of $56.74 implies a valuation ratio of 5x forward price-to-sales. To fully understand why you should be careful with BL, check out our full research report (it’s free for active Edge members).
Inspired (INSE)
Trailing 12-Month Free Cash Flow Margin: 9.9%
Specializing in digital casino gaming, Inspired (NASDAQ: INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.
Why Does INSE Fall Short?
- 1.1% annual revenue growth over the last two years was slower than its consumer discretionary peers
- Forecasted revenue decline of 3.7% for the upcoming 12 months implies demand will fall off a cliff
- Low free cash flow margin of 1.8% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
At $7.39 per share, Inspired trades at 14.7x forward P/E. Dive into our free research report to see why there are better opportunities than INSE.
One Stock to Watch:
Broadridge (BR)
Trailing 12-Month Free Cash Flow Margin: 15.3%
Processing over $10 trillion in equity and fixed income trades daily and managing proxy voting for over 800 million equity positions, Broadridge Financial Solutions (NYSE: BR) provides technology-driven solutions that power investing, governance, and communications for banks, broker-dealers, asset managers, and public companies.
Why Are We Fans of BR?
- Annual revenue growth of 8.8% over the last five years beat the sector average and underscores the unique value of its offerings
- Incremental sales over the last five years boosted profitability as its annual earnings per share growth of 11.7% outstripped its revenue performance
- Free cash flow margin expanded by 4.2 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Broadridge is trading at $221 per share, or 23.6x forward P/E. 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
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 5 Strong Momentum 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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