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. Keeping that in mind, here is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.

Two Stocks to Sell:

Wabash (WNC)

Trailing 12-Month Free Cash Flow Margin: 2.9%

With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.

Why Do We Avoid WNC?

1. Demand cratered as it couldn’t win new orders over the past two years, leading to an average 32.8% decline in its backlog
2. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 13.9%
3. Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable

Wabash is trading at $10.76 per share, or 11.3x forward P/E. Read our free research report to see why you should think twice about including WNC in your portfolio.

Bruker (BRKR)

Trailing 12-Month Free Cash Flow Margin: 5%

With roots dating back to the pioneering days of nuclear magnetic resonance technology, Bruker (NASDAQ: BRKR) develops and manufactures high-performance scientific instruments that enable researchers and industrial analysts to explore materials at microscopic, molecular, and cellular levels.

Why Are We Cautious About BRKR?

1. Day-to-day expenses have swelled relative to revenue over the last two years as its adjusted operating margin fell by 5.1 percentage points
2. Free cash flow margin shrank by 9.4 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $41.14 per share, Bruker trades at 15.1x forward P/E. To fully understand why you should be careful with BRKR, check out our full research report (it’s free).

One Stock to Buy:

Shopify (SHOP)

Trailing 12-Month Free Cash Flow Margin: 18.4%

Originally created as an internal tool for a snowboarding company, Shopify (NYSE: SHOP) provides a software platform for building and operating e-commerce businesses.

Why Is SHOP a Good Business?

1. Payment activity on its platform is soaring as its TPV growth averaged 31.7% over the last year, enabling the company to collect more fees and upsell additional services like banking
2. Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
3. Operating margin improvement of 28.1 percentage points over the last year demonstrates its ability to scale efficiently

Shopify’s stock price of $113.20 implies a valuation ratio of 13x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today