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. That said, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
OPENLANE (OPLN)
Trailing 12-Month Free Cash Flow Margin: 17.6%
Facilitating the sale of approximately 1.3 million used vehicles in 2023, OPENLANE (NYSE: OPLN) operates digital marketplaces that connect sellers and buyers of used vehicles across North America and Europe, facilitating wholesale transactions.
Why Is OPLN Not Exciting?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- ROIC of 3.1% reflects management’s challenges in identifying attractive investment opportunities
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
OPENLANE’s stock price of $36.60 implies a valuation ratio of 26.9x forward P/E. Check out our free in-depth research report to learn more about why OPLN doesn’t pass our bar.
Two Stocks to Watch:
Ross Stores (ROST)
Trailing 12-Month Free Cash Flow Margin: 11.1%
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ: ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Will ROST Outperform?
- Same-store sales growth lends it the confidence to gradually expand its store base so it can reach more customers
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 5.4% over the past two years
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Ross Stores is trading at $233.55 per share, or 2.8x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Brink's (BCO)
Trailing 12-Month Free Cash Flow Margin: 10.1%
Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE: BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.
Why Do We Like BCO?
- Solid 7.3% annual revenue growth over the last five years indicates its offerings solve complex business issues
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin grew by 4.7 percentage points over the last five years, giving the company more chips to play with
At $100.87 per share, Brink's trades at 0.7x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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.
