A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may struggle to keep up.

One Stock to Sell:

BJ's (BJRI)

Trailing 12-Month Free Cash Flow Margin: 3.5%

Founded in 1978 in California, BJ’s Restaurants (NASDAQ: BJRI) is a chain of restaurants whose menu features classic American dishes, often with a twist.

Why Do We Steer Clear of BJRI?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
2. Gross margin of 14.7% reflects the bad unit economics inherent in most restaurant businesses
3. Low returns on capital reflect management’s struggle to allocate funds effectively

BJ’s stock price of $34.28 implies a valuation ratio of 15.8x forward P/E. Dive into our free research report to see why there are better opportunities than BJRI.

Two Stocks to Watch:

Gorman-Rupp (GRC)

Trailing 12-Month Free Cash Flow Margin: 12.4%

Powering fluid dynamics since 1934, Gorman-Rupp (NYSE: GRC) has evolved from its Ohio origins into a global manufacturer and seller of pumps and pump systems.

Why Could GRC Be a Winner?

1. Impressive 13.5% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Demand is greater than supply as the company’s 12.7% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
3. Earnings per share have massively outperformed its peers over the last two years, increasing by 33% annually

Gorman-Rupp is trading at $45.33 per share, or 20x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

Astrana Health (ASTH)

Trailing 12-Month Free Cash Flow Margin: 3.3%

Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ: ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.

Why Do We Like ASTH?

1. Impressive 47.7% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Expected revenue growth of 36.2% for the next year suggests its market share will rise
3. Earnings growth has comfortably beaten the peer group average over the last five years as its EPS has compounded at 11.6% annually

At $26.48 per share, Astrana Health trades at 3.6x forward EV-to-EBITDA. Is now the right 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.

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