A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may face some trouble.
Two Stocks to Sell:
Tennant (TNC)
Trailing 12-Month Free Cash Flow Margin: 4.9%
As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE: TNC) designs, manufactures, and sells cleaning products to various sectors.
Why Do We Steer Clear of TNC?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Anticipated sales growth of 3.7% for the next year implies demand will be shaky
- Performance over the past two years shows each sale was less profitable, as its earnings per share fell by 4.3% annually
At $75.52 per share, Tennant trades at 11.6x forward P/E. Dive into our free research report to see why there are better opportunities than TNC.
BD (BDX)
Trailing 12-Month Free Cash Flow Margin: 12.2%
With a history dating back to 1897 and a presence in virtually every hospital around the globe, Becton Dickinson (NYSE: BDX) develops and manufactures medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions and professionals worldwide.
Why Are We Wary of BDX?
- Sizable revenue base leads to growth challenges as its 5.3% annual revenue increases over the last five years fell short of other healthcare companies
- Free cash flow margin shrank by 5.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- ROIC of 4.6% reflects management’s challenges in identifying attractive investment opportunities
BD’s stock price of $201.92 implies a valuation ratio of 13.7x forward P/E. If you’re considering BDX for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
W. R. Berkley (WRB)
Trailing 12-Month Free Cash Flow Margin: 21.5%
Founded in 1967 and operating through more than 50 specialized insurance units across the globe, W. R. Berkley (NYSE: WRB) underwrites commercial insurance and reinsurance through specialized subsidiaries serving industries from healthcare to construction to transportation.
Why Is WRB on Our Radar?
- Market penetration was impressive this cycle as its net premiums earned expanded by 12.4% annually over the last five years
- Share repurchases over the last five years enabled its annual earnings per share growth of 33% to outpace its revenue gains
- ROE punches in at 19.5%, illustrating management’s expertise in identifying profitable investments
W. R. Berkley is trading at $67.59 per share, or 2.4x forward P/B. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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 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.
