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 leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Flywire (FLYW)
Trailing 12-Month Free Cash Flow Margin: 15%
Initially created to solve the challenges of international student tuition payments, Flywire (NASDAQ: FLYW) provides specialized payment processing and software solutions that help educational institutions, healthcare systems, travel companies, and businesses manage complex payments.
Why Does FLYW Fall Short?
- Gross margin of 60.1% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Flywire is trading at $11.56 per share, or 2.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than FLYW.
J. M. Smucker (SJM)
Trailing 12-Month Free Cash Flow Margin: 10.9%
Best known for its fruit jams and spreads, J.M Smucker (NYSE: SJM) is a packaged foods company whose products span from peanut butter and coffee to pet food.
Why Are We Out on SJM?
- Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 11.4 percentage points
- Underwhelming 0.8% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
J. M. Smucker’s stock price of $91.05 implies a valuation ratio of 9.1x forward P/E. To fully understand why you should be careful with SJM, check out our full research report (it’s free).
One Stock to Watch:
Lennox (LII)
Trailing 12-Month Free Cash Flow Margin: 12.6%
Based in Texas and founded over a century ago, Lennox (NYSE: LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.
Why Does LII Stand Out?
- Operating margin improvement of 5.2 percentage points over the last five years demonstrates its ability to scale efficiently
- Share repurchases over the last five years enabled its annual earnings per share growth of 17.9% to outpace its revenue gains
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $505.31 per share, Lennox trades at 20.2x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
