1 Cash-Producing Stock with Exciting Potential and 2 We Find Risky

August 11, 2025 at 00:43 AM EDT

WLY Cover Image

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 leverages its financial strength to beat its competitors and two best left off your watchlist.

Two Stocks to Sell:

Wiley (WLY)

Trailing 12-Month Free Cash Flow Margin: 8.4%

With roots dating back to 1807 when Charles Wiley opened a small printing shop in Manhattan, John Wiley & Sons (NYSE: WLY) is a global academic publisher that provides scientific journals, books, digital courseware, and knowledge solutions for researchers, students, and professionals.

Why Do We Avoid WLY?

Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.7% annually over the last five years
Free cash flow margin shrank by 6.1 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Underwhelming 10.9% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $38.73 per share, Wiley trades at 1.3x trailing 12-month price-to-sales. Dive into our free research report to see why there are better opportunities than WLY.

Dell (DELL)

Trailing 12-Month Free Cash Flow Margin: 3.9%

Founded by Michael Dell in his University of Texas dorm room in 1984 with just $1,000, Dell Technologies (NYSE: DELL) provides hardware, software, and services that help organizations build their IT infrastructure, manage cloud environments, and enable digital transformation.

Why Does DELL Give Us Pause?

Sales stagnated over the last two years and signal the need for new growth strategies
Underwhelming ARR growth of 5% suggests the company faced challenges in acquiring and retaining long-term customers
9.9 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Dell is trading at $137.85 per share, or 14.3x forward P/E. Check out our free in-depth research report to learn more about why DELL doesn’t pass our bar.

One Stock to Buy:

AZEK (AZEK)

Trailing 12-Month Free Cash Flow Margin: 13.7%

With a significant portion of its products made from recycled materials, AZEK (NYSE: AZEK) designs and manufactures goods for outdoor living spaces.

Why Is AZEK a Good Business?

Annual revenue growth of 12.4% over the past five years was outstanding, reflecting market share gains this cycle
Share repurchases have amplified shareholder returns as its annual earnings per share growth of 56.9% exceeded its revenue gains over the last two years
Free cash flow margin grew by 8.8 percentage points over the last five years, giving the company more chips to play with

AZEK’s stock price of $54.35 implies a valuation ratio of 35.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at 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-micro-cap company Kadant (+351% 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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