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 reinvests wisely to drive long-term success and two that may struggle to keep up.
Two Stocks to Sell:
VF Corp (VFC)
Trailing 12-Month Free Cash Flow Margin: 2.1%
Owner of The North Face, Vans, and Supreme, VF Corp (NYSE: VFC) is a clothing conglomerate specializing in branded lifestyle apparel, footwear, and accessories.
Why Do We Pass on VFC?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
- High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate
VF Corp is trading at $15.24 per share, or 19.5x forward P/E. To fully understand why you should be careful with VFC, check out our full research report (it’s free for active Edge members).
Leggett & Platt (LEG)
Trailing 12-Month Free Cash Flow Margin: 5.8%
Founded in 1883, Leggett & Platt (NYSE: LEG) is a diversified manufacturer of products and components for various industries.
Why Do We Steer Clear of LEG?
- Products and services fail to spark excitement with consumers, as seen in its flat sales over the last five years
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 11.8% annually
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Leggett & Platt’s stock price of $9.18 implies a valuation ratio of 8.4x forward P/E. Read our free research report to see why you should think twice about including LEG in your portfolio.
One Stock to Buy:
Visa (V)
Trailing 12-Month Free Cash Flow Margin: 56.8%
Processing over 829 million transactions daily and connecting billions of cards to 150 million merchant locations worldwide, Visa (NYSE: V) operates one of the world's largest electronic payments networks, facilitating secure money movement across more than 200 countries through its VisaNet processing platform.
Why Should You Buy V?
- 11.2% annual revenue growth over the last five years surpassed the sector average as its products resonated with customers
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 16.8% exceeded its revenue gains over the last five years
- ROE punches in at 42.9%, illustrating management’s expertise in identifying profitable investments
At $348 per share, Visa trades at 28x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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 Growth Stocks for this month. 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 Comfort Systems (+782% 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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