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 is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.
Two Stocks to Sell:
BrightView (BV)
Trailing 12-Month Free Cash Flow Margin: 2.4%
An official field consultant for Major League Baseball, BrightView (NYSE: BV) offers landscaping design, development, and maintenance.
Why Do We Pass on BV?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.6% annually over the last two years
- Earnings per share have contracted by 1.7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- ROIC of 2.9% reflects management’s challenges in identifying attractive investment opportunities
BrightView’s stock price of $12.89 implies a valuation ratio of 17.4x forward P/E. If you’re considering BV for your portfolio, see our FREE research report to learn more.
Avery Dennison (AVY)
Trailing 12-Month Free Cash Flow Margin: 7.4%
Founded as Kum Kleen Products, Avery Dennison (NYSE: AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.
Why Is AVY Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Eroding returns on capital suggest its historical profit centers are aging
At $187.74 per share, Avery Dennison trades at 18.8x forward P/E. To fully understand why you should be careful with AVY, check out our full research report (it’s free).
One Stock to Watch:
Shake Shack (SHAK)
Trailing 12-Month Free Cash Flow Margin: 4.6%
Started as a hot dog cart in New York City's Madison Square Park, Shake Shack (NYSE: SHAK) is a fast-food restaurant known for its burgers and milkshakes.
Why Should SHAK Be on Your Watchlist?
- Fast expansion of new restaurants to reach markets with few or no locations is justified by its same-store sales growth
- Average same-store sales growth of 3% over the past two years indicates its restaurants are resonating with diners
- Operating margin improvement of 4.6 percentage points over the last year demonstrates its ability to scale efficiently
Shake Shack is trading at $97.78 per share, or 65.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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 6 Stocks for this week. 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.
