A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

Luckily for you, we built StockStory to help you separate the good from the bad. That said, here are two cash-producing companies that leverage their financial strength to beat the competition and one best left off your watchlist.

One Stock to Sell:

Hub Group (HUBG)

Trailing 12-Month Free Cash Flow Margin: 3.3%

Started with $10,000, Hub Group (NASDAQ: HUBG) is a provider of intermodal, truck brokerage, and logistics services, facilitating transportation solutions for businesses worldwide.

Why Do We Steer Clear of HUBG?

1. Underwhelming unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 28% annually, worse than its revenue
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Hub Group is trading at $35.71 per share, or 17.9x forward P/E. Dive into our free research report to see why there are better opportunities than HUBG.

Two Stocks to Watch:

Ulta (ULTA)

Trailing 12-Month Free Cash Flow Margin: 8.2%

Offering high-end prestige brands as well as lower-priced, mass-market ones, Ulta Beauty (NASDAQ: ULTA) is an American retailer that sells makeup, skincare, haircare, and fragrance products.

Why Does ULTA Stand Out?

1. Aggressive strategy of rolling out new stores to gobble up whitespace is prudent given its same-store sales growth
2. Strong free cash flow margin of 8.5% enables it to reinvest or return capital consistently
3. Industry-leading 32.1% return on capital demonstrates management’s skill in finding high-return investments

Ulta’s stock price of $509.41 implies a valuation ratio of 20.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.

Instacart (CART)

Trailing 12-Month Free Cash Flow Margin: 24.2%

Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.

Why Are We Bullish on CART?

1. Solid 17% annual revenue growth over the last three years underscores its platform’s appeal to consumers
2. Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 27%, and its profits increased over the last few years as it scaled
3. Free cash flow margin jumped by 16.8 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $40.93 per share, Instacart trades at 9.9x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Stocks We Like Even More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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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