A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Luckily for you, we built StockStory to help you separate the good from the bad. That said, here is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.
Two Stocks to Sell:
Wynn Resorts (WYNN)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ: WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.
Why Does WYNN Worry Us?
- 9.9% annual revenue growth over the last five years was slower than its consumer discretionary peers
- ROIC of 4% reflects management’s challenges in identifying attractive investment opportunities
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Wynn Resorts’s stock price of $127.50 implies a valuation ratio of 27.4x forward P/E. Dive into our free research report to see why there are better opportunities than WYNN.
Teledyne (TDY)
Trailing 12-Month Free Cash Flow Margin: 16.1%
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.
Why Are We Hesitant About TDY?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Free cash flow margin dropped by 2.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $567.91 per share, Teledyne trades at 25.1x forward P/E. To fully understand why you should be careful with TDY, check out our full research report (it’s free).
One Stock to Watch:
Target Hospitality (TH)
Trailing 12-Month Free Cash Flow Margin: 12.6%
Building mini-communities at places such as oil drilling sites, Target Hospitality (NASDAQ: TH) is a provider of specialty workforce lodging accommodations and services.
Why Are We Fans of TH?
- Highly efficient business model is illustrated by its impressive 25.9% operating margin
- TH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Rising returns on capital show management is finding more attractive investment opportunities
Target Hospitality is trading at $8.64 per share, or 34.3x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our comprehensive 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 9 Market-Beating Stocks. 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 Tecnoglass (+1,754% 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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