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 excels at turning cash into shareholder value and two best left off your watchlist.

Two Stocks to Sell:

Keysight (KEYS)

Trailing 12-Month Free Cash Flow Margin: 27%

Spun off from Hewlett-Packard in 2014, Keysight (NYSE: KEYS) offers electronic measurement products for use in various sectors.

Why Do We Think Twice About KEYS?

1. Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 1.8% declines over the past two years
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Keysight is trading at $168.50 per share, or 22.4x forward P/E. To fully understand why you should be careful with KEYS, check out our full research report (it’s free for active Edge members).

Insight Enterprises (NSIT)

Trailing 12-Month Free Cash Flow Margin: 2.4%

With over 35 years of IT expertise and partnerships with more than 8,000 technology providers, Insight Enterprises (NASDAQ: NSIT) provides end-to-end digital transformation solutions that help businesses modernize their IT infrastructure and maximize the value of technology.

Why Do We Pass on NSIT?

1. Annual sales declines of 7.2% for the past two years show its products and services struggled to connect with the market during this cycle
2. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.8% annually
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

Insight Enterprises’s stock price of $108.77 implies a valuation ratio of 10.3x forward P/E. Dive into our free research report to see why there are better opportunities than NSIT.

One Stock to Buy:

Magnite (MGNI)

Trailing 12-Month Free Cash Flow Margin: 26.6%

Born from the 2020 merger of Rubicon Project and Telaria, Magnite (NASDAQ: MGNI) operates the world's largest independent sell-side advertising platform that automates the buying and selling of digital advertising inventory across all channels and formats.

Why Are We Backing MGNI?

1. Market share has increased this cycle as its 33% annual revenue growth over the last five years was exceptional
2. Additional sales over the last two years increased its profitability as the 22.8% annual growth in its earnings per share outpaced its revenue
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy

At $19.33 per share, Magnite trades at 19.2x forward P/E. Is now the time to initiate a position? 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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