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.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.
Two Stocks to Sell:
Fortive (FTV)
Trailing 12-Month Free Cash Flow Margin: 24.2%
Taking its name from the Latin root of "strong", Fortive (NYSE: FTV) manufactures products and develops industrial software for numerous industries.
Why Are We Out on FTV?
- Annual sales declines of 3.1% for the past five years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- ROIC of 5.5% reflects management’s challenges in identifying attractive investment opportunities
Fortive is trading at $60.24 per share, or 19.1x forward P/E. To fully understand why you should be careful with FTV, check out our full research report (it’s free).
Option Care Health (OPCH)
Trailing 12-Month Free Cash Flow Margin: 5.3%
With a nationwide network of 177 locations serving 43 states and a team of over 4,500 clinicians, Option Care Health (NASDAQ: OPCH) is the largest independent provider of home and alternate site infusion services, delivering medications and clinical support to patients across the United States.
Why Does OPCH Fall Short?
- Estimated sales growth of 4.3% for the next 12 months implies demand will slow from its two-year trend
- Free cash flow margin was stuck in limbo over the last five years
- Unchanged returns on capital make it difficult for the company’s valuation multiple to re-rate
Option Care Health’s stock price of $24.03 implies a valuation ratio of 12x forward P/E. If you’re considering OPCH for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
EPAM (EPAM)
Trailing 12-Month Free Cash Flow Margin: 8.6%
Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.
Why Could EPAM Be a Winner?
- Market share has increased this cycle as its 13.1% annual revenue growth over the last five years was exceptional
- Earnings growth has easily exceeded the peer group average over the last five years as its EPS has compounded at 11.4% annually
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $109.70 per share, EPAM trades at 8.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.
