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

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 are two cash-producing companies that excel at turning cash into shareholder value and one that may face some trouble.

One Stock to Sell:

NetApp (NTAP)

Trailing 12-Month Free Cash Flow Margin: 25.2%

Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ: NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.

Why Are We Wary of NTAP?

1. Muted 3.1% annual revenue growth over the last two years shows its demand lagged behind its business services peers
2. Projected sales growth of 4% for the next 12 months suggests sluggish demand

At $123.22 per share, NetApp trades at 15.4x forward P/E. Dive into our free research report to see why there are better opportunities than NTAP.

Two Stocks to Buy:

Netflix (NFLX)

Trailing 12-Month Free Cash Flow Margin: 20.4%

Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.

Why Are We Backing NFLX?

1. Global Streaming Paid Memberships are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
2. Share buybacks catapulted its annual earnings per share growth to 27.8%, which outperformed its revenue gains over the last three years
3. Free cash flow margin jumped by 19.9 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Netflix’s stock price of $1,260 implies a valuation ratio of 36.4x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

HEICO (HEI)

Trailing 12-Month Free Cash Flow Margin: 18.2%

Founded in 1957, HEICO (NYSE: HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.

Why Should You Buy HEI?

1. Average organic revenue growth of 9.6% over the past two years demonstrates its ability to expand independently without relying on acquisitions
2. Earnings per share grew by 26.2% annually over the last two years, massively outpacing its peers
3. HEI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

HEICO is trading at $315 per share, or 61.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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-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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