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. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may struggle to keep up.

Two Stocks to Sell:

Red Rock Resorts (RRR)

Trailing 12-Month Free Cash Flow Margin: 15.1%

Founded in 1976, Red Rock Resorts (NASDAQ: RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.

Why Do We Avoid RRR?

1. Lackluster 1.7% annual revenue growth over the last five years indicates the company is losing ground to competitors
2. Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Red Rock Resorts is trading at $51.85 per share, or 31.6x forward P/E. Read our free research report to see why you should think twice about including RRR in your portfolio.

ASGN (ASGN)

Trailing 12-Month Free Cash Flow Margin: 7.7%

Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE: ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.

Why Are We Out on ASGN?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.7% annually over the last two years
2. Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 11.6% annually, worse than its revenue
3. 5.1 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 $50.16 per share, ASGN trades at 9.9x forward P/E. To fully understand why you should be careful with ASGN, check out our full research report (it’s free).

One Stock to Buy:

Molina Healthcare (MOH)

Trailing 12-Month Free Cash Flow Margin: 1.3%

Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.

Why Will MOH Beat the Market?

1. Annual revenue growth of 19.4% over the past five years was outstanding, reflecting market share gains this cycle
2. Scale advantages are evident in its $41.87 billion revenue base, which provides operating leverage when demand is strong
3. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 14.5% annually

Molina Healthcare’s stock price of $297.05 implies a valuation ratio of 11.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our 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-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