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. 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:

BlackLine (BL)

Trailing 12-Month Free Cash Flow Margin: 25.1%

Started in 2001 by software engineer Therese Tucker, one of the very few women founders who took their companies public, BlackLine (NASDAQ: BL) provides software for organizations to automate accounting and finance tasks.

Why Is BL Not Exciting?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 6.7% underwhelmed
2. Estimated sales growth of 6.8% for the next 12 months implies demand will slow from its three-year trend
3. Free cash flow margin is expected to remain in place over the coming year, marking a divergence from its peers

At $47.33 per share, BlackLine trades at 5.1x forward price-to-sales. Read our free research report to see why you should think twice about including BL in your portfolio.

Two Stocks to Watch:

Snowflake (SNOW)

Trailing 12-Month Free Cash Flow Margin: 24.4%

Founded in 2013 by three French engineers who spent decades working for Oracle, Snowflake (NYSE: SNOW) provides a data warehouse-as-a-service in the cloud that allows companies to store large amounts of data and analyze it in real time.

Why Is SNOW Interesting?

1. Billings growth has averaged 20.1% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
2. Platform plays a pivotal role in customer workflows as its net revenue retention rate punches in at 127%
3. Market share will likely rise over the next 12 months as its expected revenue growth of 23.3% is robust

Snowflake’s stock price of $163.26 implies a valuation ratio of 12.3x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

Cal-Maine (CALM)

Trailing 12-Month Free Cash Flow Margin: 22.6%

Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ: CALM) produces, packages, and distributes eggs.

Why Could CALM Be a Winner?

1. Annual revenue growth of 35.3% over the past three years was outstanding, reflecting market share gains
2. Incremental sales over the last three years have been highly profitable as its earnings per share increased by 278% annually, topping its revenue gains
3. Robust free cash flow margin of 17.9% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute

Cal-Maine is trading at $93.48 per share, or 8.9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks That Overcame Trump’s 2018 Tariffs

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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free.