While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, 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:
PTC (PTC)
Trailing 12-Month Free Cash Flow Margin: 34.4%
Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ: PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM.
Why Is PTC Not Exciting?
- Average ARR growth of 11.1% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Anticipated sales growth of 12.2% for the next year implies demand will be shaky
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
PTC’s stock price of $203.68 implies a valuation ratio of 8.9x forward price-to-sales. Read our free research report to see why you should think twice about including PTC in your portfolio.
Concrete Pumping (BBCP)
Trailing 12-Month Free Cash Flow Margin: 8%
Going public via SPAC in 2018, Concrete Pumping (NASDAQ: BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Why Do We Avoid BBCP?
- 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
- Earnings per share have dipped by 37.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- 7.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $7.36 per share, Concrete Pumping trades at 40.8x forward P/E. To fully understand why you should be careful with BBCP, check out our full research report (it’s free).
One Stock to Buy:
Enova (ENVA)
Trailing 12-Month Free Cash Flow Margin: 56.9%
Pioneering online lending since 2004 with a massive database of over 65 terabytes of customer behavior data, Enova International (NYSE: ENVA) provides online financial services including installment loans and lines of credit to non-prime consumers and small businesses in the United States and Brazil.
Why Are We Backing ENVA?
- Annual revenue growth of 23.4% over the last two years was superb and indicates its market share increased during this cycle
- Share buybacks catapulted its annual earnings per share growth to 26.8%, which outperformed its revenue gains over the last two years
- Annual book value per share growth of 25.4% over the past five years was outstanding, reflecting strong capital accumulation this cycle
Enova is trading at $125.34 per share, or 9.9x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
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 9 Market-Beating Stocks. 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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