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. Keeping that in mind, 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:

Verisk (VRSK)

Trailing 12-Month Free Cash Flow Margin: 36.8%

Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ: VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.

Why Does VRSK Give Us Pause?

1. Sales trends were unexciting over the last five years as its 2% annual growth was below the typical business services company
2. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 7.2% annually

At $206 per share, Verisk trades at 27.8x forward P/E. To fully understand why you should be careful with VRSK, check out our full research report (it’s free for active Edge members).

Two Stocks to Buy:

Uber (UBER)

Trailing 12-Month Free Cash Flow Margin: 18%

Notoriously funded with $7.7 billion from the Softbank Vision Fund, Uber (NYSE: UBER) operates a platform of on-demand services such as ride-hailing, food delivery, and freight.

Why Are We Backing UBER?

1. Monthly Active Platform Consumers are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
2. Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 151% outpaced its revenue gains
3. Free cash flow margin increased by 15.4 percentage points over the last few years, giving the company more capital to invest or return to shareholders

Uber is trading at $95.65 per share, or 20.5x forward EV/EBITDA. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.

QuinStreet (QNST)

Trailing 12-Month Free Cash Flow Margin: 6.7%

Founded during the dot-com era in 1999 and specializing in high-intent consumer traffic, QuinStreet (NASDAQ: QNST) operates digital performance marketplaces that connect clients in financial and home services with consumers actively searching for their products.

Why Should You Buy QNST?

1. Annual revenue growth of 37.2% over the past two years was outstanding, reflecting market share gains this cycle
2. Forecasted revenue growth of 8.7% for the next 12 months indicates its momentum over the last two years is sustainable
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 160% annually

QuinStreet’s stock price of $13.95 implies a valuation ratio of 13.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

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 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 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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