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. That said, here are two cash-producing companies that reinvest wisely to drive long-term success and one that may face some trouble.

One Stock to Sell:

ACV Auctions (ACVA)

Trailing 12-Month Free Cash Flow Margin: 7.9%

Founded in 2014, ACV Auctions (NASDAQ: ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.

Why Does ACVA Fall Short?

1. Bad unit economics and steep infrastructure costs are reflected in its low gross margin of 25.1%
2. Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
3. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.3% for the last two years

ACV Auctions is trading at $14.58 per share, or 27.3x forward EV/EBITDA. Check out our free in-depth research report to learn more about why ACVA doesn’t pass our bar.

Two Stocks to Buy:

Monolithic Power Systems (MPWR)

Trailing 12-Month Free Cash Flow Margin: 26.2%

Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.

Why Is MPWR a Good Business?

1. Annual revenue growth of 13.1% over the last two years was superb and indicates its market share increased during this cycle
2. Strong free cash flow margin of 29.2% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

Monolithic Power Systems’s stock price of $715.09 implies a valuation ratio of 41.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Celsius (CELH)

Trailing 12-Month Free Cash Flow Margin: 15.5%

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 Are We Backing CELH?

1. Annual revenue growth of 49.5% over the last three years was superb and indicates its market share is rising
2. Earnings growth has trumped its peers over the last three years as its EPS has compounded at 77.6% annually
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

At $46.80 per share, Celsius trades at 44x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive 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 6 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.

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