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 leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Shoe Carnival (SCVL)
Trailing 12-Month Free Cash Flow Margin: 3.1%
Known for its playful atmosphere that features carnival elements, Shoe Carnival (NASDAQ: SCVL) is a retailer that sells footwear from mainstream brands for the entire family.
Why Do We Avoid SCVL?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Smaller revenue base of $1.14 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 18.6% annually, worse than its revenue
Shoe Carnival is trading at $18.74 per share, or 11.5x forward P/E. Dive into our free research report to see why there are better opportunities than SCVL.
UniFirst (UNF)
Trailing 12-Month Free Cash Flow Margin: 5.9%
With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.
Why Are We Hesitant About UNF?
- Annual revenue growth of 4.4% over the last two years was below our standards for the business services sector
- Estimated sales growth of 2.2% for the next 12 months implies demand will slow from its two-year trend
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 2.3% annually
At $177.12 per share, UniFirst trades at 25.6x forward P/E. If you’re considering UNF for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Meta (META)
Trailing 12-Month Free Cash Flow Margin: 22.5%
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ: META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
Why Is META a Good Business?
- 14.8% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Strong free cash flow margin of 26.9% enables it to reinvest or return capital consistently
Meta’s stock price of $643.18 implies a valuation ratio of 12.6x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our 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 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-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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
