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. That said, here are two cash-producing companies that reinvest wisely to drive long-term success and one that may struggle to keep up.

One Stock to Sell:

Qorvo (QRVO)

Trailing 12-Month Free Cash Flow Margin: 16.1%

Formed by the merger of TriQuint and RF Micro Devices, Qorvo (NASDAQ: QRVO) is a designer and manufacturer of RF chips used in almost all smartphones globally, along with a variety of chips used in networking equipment and infrastructure.

Why Are We Out on QRVO?

1. 2.3% annual revenue growth over the last five years was slower than its semiconductor peers
2. Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 22.3 percentage points
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 11.7 percentage points

Qorvo is trading at $93.01 per share, or 15.8x forward P/E. To fully understand why you should be careful with QRVO, check out our full research report (it’s free).

Two Stocks to Buy:

Celsius (CELH)

Trailing 12-Month Free Cash Flow Margin: 12.7%

With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.

Why Should You Buy CELH?

1. Market share has increased over the last three years as its 50.7% annual revenue growth was exceptional
2. Earnings per share grew by 82.2% annually over the last three years and trumped its peers
3. Industry-leading 34.3% return on capital demonstrates management’s skill in finding high-return investments, and its returns are climbing as it finds even more attractive growth opportunities

Celsius’s stock price of $51.06 implies a valuation ratio of 51.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

LPL Financial (LPLA)

Trailing 12-Month Free Cash Flow Margin: 8.6%

As the nation's largest independent broker-dealer with no proprietary products of its own, LPL Financial (NASDAQ: LPLA) provides technology, compliance, and business support services to independent financial advisors and institutions who manage investments for retail clients.

Why Will LPLA Beat the Market?

1. Annual revenue growth of 22.6% over the last two years was superb and indicates its market share increased during this cycle
2. Performance over the past five years shows its incremental sales were more profitable, as its annual earnings per share growth of 21.3% outpaced its revenue gains
3. ROE punches in at 40.4%, illustrating management’s expertise in identifying profitable investments

At $341.30 per share, LPL Financial trades at 16.7x forward P/E. Is now the time to initiate a position? See for yourself 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 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-small-cap company Comfort Systems (+782% 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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