A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
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 leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Hyatt Hotels (H)
Trailing 12-Month Free Cash Flow Margin: 2%
Founded in 1957, Hyatt Hotels (NYSE: H) is a global hospitality company with a portfolio of 20 premier brands and over 950 properties across 65 countries.
Why Does H Worry Us?
- Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Negative returns on capital show management lost money while trying to expand the business
At $142.06 per share, Hyatt Hotels trades at 46.1x forward P/E. To fully understand why you should be careful with H, check out our full research report (it’s free).
CONMED (CNMD)
Trailing 12-Month Free Cash Flow Margin: 11.2%
With over five decades of experience in surgical innovation since its founding in 1970, CONMED (NYSE: CNMD) develops and manufactures medical devices and equipment for surgical procedures, specializing in orthopedic and general surgery products.
Why Do We Think Twice About CNMD?
- Revenue base of $1.33 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Low returns on capital reflect management’s struggle to allocate funds effectively
CONMED is trading at $52.81 per share, or 11.7x forward P/E. If you’re considering CNMD for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Zoetis (ZTS)
Trailing 12-Month Free Cash Flow Margin: 23.6%
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.
Why Could ZTS Be a Winner?
- Constant currency growth averaged 8.6% over the past two years, showing it can expand globally regardless of the macroeconomic environment
- ZTS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
- Industry-leading 29.4% return on capital demonstrates management’s skill in finding high-return investments
Zoetis’s stock price of $149.42 implies a valuation ratio of 23.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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-small-cap company Comfort Systems (+782% 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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