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 reinvests wisely to drive long-term success and two best left off your watchlist.

Two Industrials Stocks to Sell:

Tennant (TNC)

Trailing 12-Month Free Cash Flow Margin: 3.6%

As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE: TNC) designs, manufactures, and sells cleaning products to various sectors.

Why Are We Out on TNC?

1. Annual sales declines of 1.6% for the past two years show its products and services struggled to connect with the market during this cycle
2. Sales were less profitable over the last two years as its earnings per share fell by 16.8% annually, worse than its revenue declines
3. Waning returns on capital imply its previous profit engines are losing steam

At $69.84 per share, Tennant trades at 14x forward P/E. Dive into our free research report to see why there are better opportunities than TNC.

MasTec (MTZ)

Trailing 12-Month Free Cash Flow Margin: 2%

Involved in the 1996 Olympic Games MasTec (NYSE: MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

Why Does MTZ Fall Short?

1. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 12.7%
2. Operating margin of 3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
3. 5.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

MasTec is trading at $342.97 per share, or 39.6x forward P/E. To fully understand why you should be careful with MTZ, check out our full research report (it’s free).

One Industrials Stock to Buy:

ESCO (ESE)

Trailing 12-Month Free Cash Flow Margin: 19.9%

A developer of the communication systems used in the Batmobile of “The Dark Knight,” ESCO (NYSE: ESE) is a provider of engineered components for the aerospace, defense, and utility sectors.

Why Will ESE Beat the Market?

1. Annual revenue growth of 11.5% over the past two years was outstanding, reflecting market share gains this cycle
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 36.3% over the last two years outstripped its revenue performance
3. Free cash flow margin grew by 10.9 percentage points over the last five years, giving the company more chips to play with

ESCO’s stock price of $292.28 implies a valuation ratio of 35.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.