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 reinvests wisely to drive long-term success and two best left off your watchlist.
Two Stocks to Sell:
Arhaus (ARHS)
Trailing 12-Month Free Cash Flow Margin: 4.3%
With an aesthetic that features natural materials such as reclaimed wood, Arhaus (NASDAQ:ARHS) is a high-end furniture retailer that sells everything from sofas to rugs to bookcases.
Why Are We Hesitant About ARHS?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Subscale operations are evident in its revenue base of $1.38 billion, meaning it has fewer distribution channels than its larger rivals
- Issuance of new shares over the last three years caused its earnings per share to fall by 22% annually while its revenue grew
Arhaus is trading at $7.67 per share, or 14.7x forward P/E. If you’re considering ARHS for your portfolio, see our FREE research report to learn more.
TechnipFMC (FTI)
Trailing 12-Month Free Cash Flow Margin: 14.6%
Operating a fleet of 16 specialized vessels that install equipment on the seafloor, TechnipFMC (NYSE:FTI) designs and manufactures subsea systems that control the flow of oil and natural gas from the ocean floor to processing facilities.
Why Does FTI Worry Us?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 5.3% annually over the last five years
- Costly operations and weak unit economics result in an inferior gross margin of 17.5% that must be offset through higher production volumes
At $74.12 per share, TechnipFMC trades at 24.6x forward P/E. To fully understand why you should be careful with FTI, check out our full research report (it’s free).
One Stock to Watch:
CRA (CRAI)
Trailing 12-Month Free Cash Flow Margin: 2.5%
Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ:CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.
Why Are We Positive On CRAI?
- Market share has increased this cycle as its 9.8% annual revenue growth over the last two years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 22.6% exceeded its revenue gains over the last two years
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
CRA’s stock price of $150.43 implies a valuation ratio of 17.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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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.