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 that may struggle to keep up.

Two Stocks to Sell:

GoDaddy (GDDY)

Trailing 12-Month Free Cash Flow Margin: 32.6%

Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE: GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools.

Why Should You Dump GDDY?

1. Bookings growth averaged a weak 7.8% over the last year, suggesting it may need to tweak its product roadmap or go-to-market strategy
2. Projected sales growth of 6.5% for the next 12 months suggests sluggish demand
3. Gross margin of 63.6% is below its competitors, leaving less money to invest in areas like marketing and R&D

At $124.11 per share, GoDaddy trades at 3.3x forward price-to-sales. If you’re considering GDDY for your portfolio, see our FREE research report to learn more.

SolarEdge (SEDG)

Trailing 12-Month Free Cash Flow Margin: 6%

Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.

Why Do We Avoid SEDG?

1. Demand for its offerings was relatively low as its number of megawatts shipped has underwhelmed
2. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
3. Negative EBITDA restricts its access to capital and increases the probability of shareholder dilution if things turn unexpectedly

SolarEdge is trading at $28.83 per share, or 1.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than SEDG.

One Stock to Watch:

HNI (HNI)

Trailing 12-Month Free Cash Flow Margin: 7.3%

With roots dating back to 1944 and a significant acquisition of Kimball International in 2023, HNI (NYSE: HNI) manufactures and sells office furniture systems, seating, and storage solutions, as well as residential fireplaces and heating products.

Why Could HNI Be a Winner?

1. Operating margin expanded by 3.9 percentage points over the last five years as it scaled and became more efficient
2. Share buybacks catapulted its annual earnings per share growth to 25.4%, which outperformed its revenue gains over the last two years
3. Returns on capital are growing as management capitalizes on its market opportunities

HNI’s stock price of $42.04 implies a valuation ratio of 10.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today.