While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
Luckily for you, we built StockStory to help you separate the good from the bad. 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:
WESCO (WCC)
Trailing 12-Month Free Cash Flow Margin: 2.9%
Based in Pittsburgh, WESCO (NYSE: WCC) provides electrical, industrial, and communications products and augments them with services such as supply chain management.
Why Are We Wary of WCC?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Earnings per share have contracted by 12.4% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2% for the last five years
WESCO’s stock price of $210.11 implies a valuation ratio of 14.3x forward P/E. Check out our free in-depth research report to learn more about why WCC doesn’t pass our bar.
Intercontinental Exchange (ICE)
Trailing 12-Month Free Cash Flow Margin: 41.2%
Starting as an energy trading platform in 2000 before acquiring the iconic New York Stock Exchange in 2013, Intercontinental Exchange (NYSE: ICE) operates global financial exchanges, clearing houses, and provides data services and mortgage technology solutions to financial institutions and corporations.
Why Does ICE Worry Us?
- Incremental sales over the last five years were less profitable as its 8.9% annual earnings per share growth lagged its revenue gains
Intercontinental Exchange is trading at $160.98 per share, or 22.2x forward P/E. If you’re considering ICE for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
W. R. Berkley (WRB)
Trailing 12-Month Free Cash Flow Margin: 24.5%
Founded in 1967 and operating through more than 50 specialized insurance units across the globe, W. R. Berkley (NYSE: WRB) underwrites commercial insurance and reinsurance through specialized subsidiaries serving industries from healthcare to construction to transportation.
Why Is WRB on Our Radar?
- Net premiums earned expanded by 12.7% annually over the last five years, demonstrating exceptional market penetration this cycle
- Share buybacks catapulted its annual earnings per share growth to 37.4%, which outperformed its revenue gains over the last five years
- Exciting book value per share outlook for the upcoming 12 months calls for 28.2% growth, an acceleration from its two-year trend
At $76.18 per share, W. R. Berkley trades at 2.9x forward P/B. Is now the right time to buy? Find out 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 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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