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. Keeping that in mind, 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:
UFP Industries (UFPI)
Trailing 12-Month Free Cash Flow Margin: 2.7%
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
Why Does UFPI Worry Us?
- Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
- Earnings per share have dipped by 20.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
UFP Industries is trading at $100.97 per share, or 15.6x forward P/E. Dive into our free research report to see why there are better opportunities than UFPI.
ASGN (ASGN)
Trailing 12-Month Free Cash Flow Margin: 8.5%
Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE: ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.
Why Should You Dump ASGN?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.8% annually over the last two years
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Earnings per share fell by 1.8% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
At $54.25 per share, ASGN trades at 11.6x forward P/E. If you’re considering ASGN for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Natera (NTRA)
Trailing 12-Month Free Cash Flow Margin: 5.3%
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ: NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Are We Backing NTRA?
- Products are reaching more customers as its tests processed averaged 21% growth over the past two years
- Adjusted operating margin expanded by 38.7 percentage points over the last two years as it scaled and became more efficient
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has achieved financial self-sustainability
Natera’s stock price of $166 implies a valuation ratio of 10.4x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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-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
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