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. That said, here is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.
Two Stocks to Sell:
L.B. Foster (FSTR)
Trailing 12-Month Free Cash Flow Margin: 4.5%
Founded with a $2,500 loan, L.B. Foster (NASDAQ: FSTR) is a provider of products and services for the transportation and energy infrastructure sectors, including rail products, construction materials, and coating solutions.
Why Are We Out on FSTR?
- Sales tumbled by 1.6% annually over the last five years, showing market trends are working against its favor during this cycle
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
L.B. Foster’s stock price of $25.58 implies a valuation ratio of 6x forward EV-to-EBITDA. If you’re considering FSTR for your portfolio, see our FREE research report to learn more.
Charles Schwab (SCHW)
Trailing 12-Month Free Cash Flow Margin: 79.4%
Founded in 1971 as a disruptive force challenging Wall Street's high fees and limited access, Charles Schwab (NYSE: SCHW) is a wealth management and brokerage firm that provides investment services, banking, and financial advice to individual investors and independent advisors.
Why Does SCHW Fall Short?
- Sizable revenue base leads to growth challenges as its 2% annual revenue increases over the last two years fell short of other financials companies
- Earnings per share lagged its peers over the last two years as they only grew by 1.4% annually
Charles Schwab is trading at $92.03 per share, or 18x forward P/E. To fully understand why you should be careful with SCHW, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Bloom Energy (BE)
Trailing 12-Month Free Cash Flow Margin: 2.7%
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
Why Will BE Beat the Market?
- Market share has increased this cycle as its 15.8% annual revenue growth over the last five years was exceptional
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has passed a significant test
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
At $84.80 per share, Bloom Energy trades at 168x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
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 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-small-cap company Exlservice (+354% 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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