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.

Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, 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:

Flowers Foods (FLO)

Trailing 12-Month Free Cash Flow Margin: 6.3%

With Wonder Bread as its premier brand, Flower Foods (NYSE: FLO) is a packaged foods company that focuses on bakery products such as breads, buns, and cakes.

Why Do We Think Twice About FLO?

1. Declining unit sales over the past two years suggest it might have to lower prices to stimulate growth
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Flat earnings per share over the last three years underperformed the sector average

At $16.03 per share, Flowers Foods trades at 13.6x forward P/E. If you’re considering FLO for your portfolio, see our FREE research report to learn more.

ePlus (PLUS)

Trailing 12-Month Free Cash Flow Margin: 14.3%

Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.

Why Should You Sell PLUS?

1. Sales stagnated over the last two years and signal the need for new growth strategies
2. Earnings per share have contracted by 3.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
3. ROIC of 14.1% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up

ePlus’s stock price of $64.78 implies a valuation ratio of 14.1x forward P/E. Read our free research report to see why you should think twice about including PLUS in your portfolio.

One Stock to Watch:

TJX (TJX)

Trailing 12-Month Free Cash Flow Margin: 6.6%

Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE: TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.

Why Is TJX Interesting?

1. Same-store sales provide a solid foundation for the steady expansion of its stores
2. Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 4.4% over the past two years
3. Massive revenue base of $56.99 billion makes up for its weaker gross margin and makes it a household name that influences purchasing decisions

TJX is trading at $124 per share, or 27.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.

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