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?
- 2.3% annual revenue growth over the last five years was slower than its semiconductor peers
- Day-to-day expenses have swelled relative to revenue over the last five years as its operating margin fell by 22.3 percentage points
- 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?
- Market share has increased over the last three years as its 50.7% annual revenue growth was exceptional
- Earnings per share grew by 82.2% annually over the last three years and trumped its peers
- 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?
- Annual revenue growth of 22.6% over the last two years was superb and indicates its market share increased during this cycle
- 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
- 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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