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 are two cash-producing companies that leverage their financial strength to beat the competition and one that may struggle to keep up.

One Stock to Sell:

BJ's (BJRI)

Trailing 12-Month Free Cash Flow Margin: 3.8%

Founded in 1978 in California, BJ’s Restaurants (NASDAQ: BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.

Why Should You Dump BJRI?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Gross margin of 14.7% reflects the bad unit economics inherent in most restaurant businesses
3. Underwhelming 2.6% return on capital reflects management’s difficulties in finding profitable growth opportunities

BJ's is trading at $33.01 per share, or 15.9x forward P/E. To fully understand why you should be careful with BJRI, check out our full research report (it’s free).

Two Stocks to Watch:

United Parks & Resorts (PRKS)

Trailing 12-Month Free Cash Flow Margin: 14.7%

Parent company of SeaWorld and home of the world-famous Shamu, United Parks & Resorts (NYSE: PRKS) is a theme park chain featuring marine life, live entertainment, roller coasters, and waterparks.

Why Do We Like PRKS?

1. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 26.5%
2. Share buybacks catapulted its annual earnings per share growth to 39.7%, which outperformed its revenue gains over the last five years
3. Rising returns on capital show management is finding more attractive investment opportunities

At $52.58 per share, United Parks & Resorts trades at 10.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Coupang (CPNG)

Trailing 12-Month Free Cash Flow Margin: 2.4%

Founded in 2010 by Harvard Business School student Bom Kim, Coupang (NYSE: CPNG) is an e-commerce giant often referred to as the "Amazon of South Korea".

Why Could CPNG Be a Winner?

1. Active Customers have grown by 11.8% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
2. Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 32% outpaced its revenue gains
3. Free cash flow margin increased by 8 percentage points over the last few years, giving the company more capital to invest or return to shareholders

Coupang’s stock price of $28.60 implies a valuation ratio of 26.1x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

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 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-micro-cap company Kadant (+351% 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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