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 are two cash-producing companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
BJ's (BJ)
Trailing 12-Month Free Cash Flow Margin: 1.4%
Appealing to the budget-conscious individual shopping for a household, BJ’s Wholesale Club (NYSE: BJ) is a membership-only retail chain that sells groceries, appliances, electronics, and household items, often in bulk quantities.
Why Does BJ Fall Short?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 18.4%
- Poor expense management has led to an operating margin of 3.9% that is below the industry average
BJ's is trading at $96.06 per share, or 21.6x forward P/E. If you’re considering BJ for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
American Superconductor (AMSC)
Trailing 12-Month Free Cash Flow Margin: 10.2%
Founded in 1987, American Superconductor (NASDAQ: AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
Why Is AMSC a Good Business?
- Annual revenue growth of 49.8% over the last two years was superb and indicates its market share increased during this cycle
- Free cash flow profile has moved into positive territory over the last five years, showing the company has crossed a key inflection point
- Improving returns on capital suggest its past investments are beginning to deliver value
American Superconductor’s stock price of $61.34 implies a valuation ratio of 107.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Nubank (NU)
Trailing 12-Month Free Cash Flow Margin: 41.9%
With nearly 94 million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE: NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.
Why Is NU a Top Pick?
- Market share has increased this cycle as its 44.9% annual revenue growth over the last two years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 99.9% over the last two years outstripped its revenue performance
At $16.14 per share, Nubank trades at 23x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Growth Stocks for this month. 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-small-cap company Exlservice (+354% 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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