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. That said, here are two cash-producing companies that excel at turning cash into shareholder value and one best left off your watchlist.

One Stock to Sell:

Steven Madden (SHOO)

Trailing 12-Month Free Cash Flow Margin: 5.6%

As seen in the infamous Wolf of Wall Street movie, Steven Madden (NASDAQ: SHOO) is a fashion brand famous for its trendy and innovative footwear, appealing to a young and style-conscious audience.

Why Should You Sell SHOO?

1. Annual revenue growth of 13.2% over the last five years was below our standards for the consumer discretionary sector
2. Poor free cash flow margin of 7.8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

Steven Madden’s stock price of $39.16 implies a valuation ratio of 20.2x forward P/E. Read our free research report to see why you should think twice about including SHOO in your portfolio.

Two Stocks to Watch:

Celsius (CELH)

Trailing 12-Month Free Cash Flow Margin: 24.6%

With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.

Why Should CELH Be on Your Watchlist?

1. Annual revenue growth of 54.2% over the past three years was outstanding, reflecting market share gains
2. Earnings per share grew by 321% annually over the last three years, massively outpacing its peers
3. CELH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety

At $43.37 per share, Celsius trades at 30.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Leidos (LDOS)

Trailing 12-Month Free Cash Flow Margin: 9.5%

Formed through the split of IT services company SAIC, Leidos (NYSE: LDOS) offers technology and engineering solutions such as military training systems for the defense, civil, and health markets.

Why Are We Positive On LDOS?

1. Demand is greater than supply as the company’s 20.2% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
2. Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
3. Share repurchases over the last two years enabled its annual earnings per share growth of 28.2% to outpace its revenue gains

Leidos is trading at $170.02 per share, or 13.2x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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).

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