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 leverages its financial strength to beat its competitors and two best left off your watchlist.
Two Stocks to Sell:
Conagra (CAG)
Trailing 12-Month Free Cash Flow Margin: 7.8%
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE: CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Should You Sell CAG?
- Shrinking unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
At $17.38 per share, Conagra trades at 9.9x forward P/E. Read our free research report to see why you should think twice about including CAG in your portfolio.
Veralto (VLTO)
Trailing 12-Month Free Cash Flow Margin: 18.1%
Spun off from Danaher in 2023, Veralto (NYSE: VLTO) provides water analytics and treatment solutions.
Why Are We Hesitant About VLTO?
- Muted 4.4% annual revenue growth over the last four years shows its demand lagged behind its industrials peers
- Estimated sales growth of 5.4% for the next 12 months is soft and implies weaker demand
Veralto’s stock price of $101 implies a valuation ratio of 24.6x forward P/E. To fully understand why you should be careful with VLTO, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Northwest Pipe (NWPX)
Trailing 12-Month Free Cash Flow Margin: 9.3%
Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ: NWPX) is a manufacturer of pipeline systems for water infrastructure.
Why Could NWPX Be a Winner?
- Market share has increased this cycle as its 12.5% annual revenue growth over the last five years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 19.9% exceeded its revenue gains over the last two years
- Free cash flow margin increased by 13.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Northwest Pipe is trading at $64.08 per share, or 16.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged 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-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.
