Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.

Two Stocks to Sell:

Perdoceo Education (PRDO)

Trailing 12-Month Free Cash Flow Margin: 23%

Formerly known as Career Education Corporation, Perdoceo Education (NASDAQ: PRDO) is an educational services company that specializes in postsecondary education.

Why Do We Think Twice About PRDO?

1. Muted 1.3% annual revenue growth over the last two years shows its demand lagged behind its consumer discretionary peers
2. Waning returns on capital imply its previous profit engines are losing steam

Perdoceo Education is trading at $33.62 per share, or 13.6x forward EV-to-EBITDA. To fully understand why you should be careful with PRDO, check out our full research report (it’s free).

Northwest Pipe (NWPX)

Trailing 12-Month Free Cash Flow Margin: 13.3%

Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ: NWPX) is a manufacturer of pipeline systems for water infrastructure.

Why Does NWPX Worry Us?

1. 5.2% annual revenue growth over the last two years was slower than its industrials peers
2. Demand will likely fall over the next 12 months as Wall Street expects flat revenue
3. Earnings per share have contracted by 2.1% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance

Northwest Pipe’s stock price of $39.30 implies a valuation ratio of 11.5x forward P/E. Read our free research report to see why you should think twice about including NWPX in your portfolio.

One Stock to Buy:

GE Aerospace (GE)

Trailing 12-Month Free Cash Flow Margin: 14.8%

One of the original 12 companies on the Dow Jones Industrial Average, General Electric (NYSE: GE) is a multinational conglomerate providing technologies for various sectors including aviation, power, renewable energy, and healthcare.

Why Are We Backing GE?

1. Market share has increased this cycle as its 20.1% annual revenue growth over the last two years was exceptional
2. Robust free cash flow margin of 16.2% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
3. Returns on capital are climbing as management makes more lucrative bets

At $246.50 per share, GE Aerospace trades at 43.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

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 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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.