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.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two best left off your watchlist.
Two Stocks to Sell:
UFP Technologies (UFPT)
Trailing 12-Month Free Cash Flow Margin: 14.6%
With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies (NASDAQ: UFPT) designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.
Why Do We Think Twice About UFPT?
- Revenue base of $598 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Estimated sales growth of 4.6% for the next 12 months implies demand will slow from its two-year trend
At $220.20 per share, UFP Technologies trades at 20.8x forward P/E. To fully understand why you should be careful with UFPT, check out our full research report (it’s free for active Edge members).
T. Rowe Price (TROW)
Trailing 12-Month Free Cash Flow Margin: 20.6%
Founded in 1937 by Thomas Rowe Price Jr., who pioneered the growth stock investing approach, T. Rowe Price (NASDAQ: TROW) is an investment management firm that offers mutual funds, advisory services, and retirement planning solutions to individuals and institutions.
Why Are We Hesitant About TROW?
- Sales trends were unexciting over the last five years as its 4% annual growth was below the typical financials company
- Performance over the past five years shows its incremental sales were less profitable, as its 1.5% annual earnings per share growth trailed its revenue gains
T. Rowe Price is trading at $100.27 per share, or 9.4x forward P/E. Check out our free in-depth research report to learn more about why TROW doesn’t pass our bar.
One Stock to Watch:
Vimeo (VMEO)
Trailing 12-Month Free Cash Flow Margin: 11.7%
Originally launched in 2004 as a platform for filmmakers seeking a high-quality alternative to YouTube, Vimeo (NASDAQ: VMEO) provides cloud-based video creation, editing, hosting, and distribution software that helps businesses and creators make, manage, and share professional-quality videos.
Why Are We Fans of VMEO?
- Earnings per share grew by 60.8% annually over the last two years and trumped its peers
- Free cash flow margin increased by 5.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Vimeo’s stock price of $7.85 implies a valuation ratio of 35.9x 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.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% 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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