Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.
Two Stocks to Sell:
MGP Ingredients (MGPI)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ: MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
Why Do We Think MGPI Will Underperform?
- Annual sales declines of 8.6% for the past three years show its products struggled to connect with the market
- Projected sales decline of 13.5% over the next 12 months indicates demand will continue deteriorating
- Operating margin declined by 18.3 percentage points over the last year as its sales cratered
At $25.16 per share, MGP Ingredients trades at 11x forward P/E. Check out our free in-depth research report to learn more about why MGPI doesn’t pass our bar.
ANI Pharmaceuticals (ANIP)
Trailing 12-Month Free Cash Flow Margin: 18.8%
With a diverse portfolio of 116 pharmaceutical products and a growing rare disease platform, ANI Pharmaceuticals (NASDAQ: ANIP) develops, manufactures, and markets branded and generic prescription pharmaceuticals, with a focus on rare disease treatments.
Why Does ANIP Give Us Pause?
- Revenue base of $826.9 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 4.5 percentage points
- Negative returns on capital show that some of its growth strategies have backfired
ANI Pharmaceuticals’s stock price of $82.97 implies a valuation ratio of 11x forward P/E. If you’re considering ANIP for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Samsara (IOT)
Trailing 12-Month Free Cash Flow Margin: 12.8%
From sensors on vehicles to AI-powered cameras that help prevent accidents, Samsara (NYSE: IOT) is a cloud-based Internet of Things platform that helps businesses improve the safety, efficiency, and sustainability of their physical operations.
Why Will IOT Outperform?
- Customers view its software as mission-critical to their operations as its ARR has averaged 30.5% growth over the last year
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Operating margin expanded by 19.7 percentage points over the last year as it scaled and became more efficient
Samsara is trading at $32.12 per share, or 10.3x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
