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 is one cash-producing company that reinvests wisely to drive long-term success and two best left off your watchlist.
Two Stocks to Sell:
Qualys (QLYS)
Trailing 12-Month Free Cash Flow Margin: 44.7%
Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ: QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.
Why Is QLYS Not Exciting?
- Underwhelming ARR growth of 10.3% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Projected sales growth of 8.9% for the next 12 months suggests sluggish demand
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
At $192.68 per share, Qualys trades at 8.7x forward price-to-sales. Check out our free in-depth research report to learn more about why QLYS doesn’t pass our bar.
VF Corp (VFC)
Trailing 12-Month Free Cash Flow Margin: 6.7%
Owner of The North Face, Vans, and Supreme, VF Corp (NYSE: VFC) is a clothing conglomerate specializing in branded lifestyle apparel, footwear, and accessories.
Why Do We Steer Clear of VFC?
- Products and services aren’t resonating with the market as its revenue declined by 2.1% annually over the last five years
- Low free cash flow margin of 4.6% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
VF Corp is trading at $17.25 per share, or 14.2x forward P/E. If you’re considering VFC for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Curtiss-Wright (CW)
Trailing 12-Month Free Cash Flow Margin: 17.3%
Formed from a merger of 12 companies, Curtiss-Wright (NYSE: CW) provides a range of products and services to the aerospace, industrial, electronic, and maritime industries.
Why Are We Bullish on CW?
- 10.2% annual revenue growth over the last two years surpassed the sector average as its offerings resonated with customers
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin jumped by 9 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Curtiss-Wright’s stock price of $502.74 implies a valuation ratio of 31.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
