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.
Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here are two cash-producing companies that reinvest wisely to drive long-term success and one that may face some trouble.
One Stock to Sell:
Post (POST)
Trailing 12-Month Free Cash Flow Margin: 6%
Founded in 1895, Post (NYSE: POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.
Why Are We Wary of POST?
- Shrinking unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Estimated sales growth of 3.4% for the next 12 months implies demand will slow from its three-year trend
- Underwhelming 5.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $99.62 per share, Post trades at 14.3x forward P/E. Dive into our free research report to see why there are better opportunities than POST.
Two Stocks to Buy:
SentinelOne (S)
Trailing 12-Month Free Cash Flow Margin: 4.7%
Built on the principle of "fighting machine with machine," SentinelOne (NYSE: S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.
Why Are We Backing S?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Free cash flow margin is forecasted to grow by 3.4 percentage points in the coming year, potentially giving the company more chips to play with
SentinelOne is trading at $14.71 per share, or 4.3x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
SPX Technologies (SPXC)
Trailing 12-Month Free Cash Flow Margin: 13.8%
With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE: SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.
Why Do We Love SPXC?
- Annual revenue growth of 12.7% over the past two years was outstanding, reflecting market share gains this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Earnings per share have massively outperformed its peers over the last two years, increasing by 23% annually
SPX Technologies’s stock price of $203.27 implies a valuation ratio of 27.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum 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 Tecnoglass (+1,754% 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.
