While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Bentley Systems (BSY)
Trailing 12-Month Free Cash Flow Margin: 31.6%
Pioneering the concept of "digital twins" for infrastructure projects long before it became an industry buzzword, Bentley Systems (NASDAQ: BSY) provides software solutions that help engineers design, build, and operate infrastructure projects across sectors including roads, bridges, utilities, mining, and industrial facilities.
Why Do We Think Twice About BSY?
- Average ARR growth of 12.8% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Estimated sales growth of 11.9% for the next 12 months is soft and implies weaker demand
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
Bentley Systems is trading at $30.37 per share, or 5.6x forward price-to-sales. Read our free research report to see why you should think twice about including BSY in your portfolio.
Clorox (CLX)
Trailing 12-Month Free Cash Flow Margin: 5.6%
Founded in 1913 with bleach as the sole product offering, Clorox (NYSE: CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.
Why Are We Cautious About CLX?
- Products have few die-hard fans as sales have declined by 1.9% annually over the last three years
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Free cash flow margin dropped by 5.8 percentage points over the last year, implying the company became more capital intensive as competition picked up
At $97.58 per share, Clorox trades at 15.9x forward P/E. Dive into our free research report to see why there are better opportunities than CLX.
One Stock to Watch:
Casella Waste Systems (CWST)
Trailing 12-Month Free Cash Flow Margin: 9.7%
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Why Is CWST Interesting?
- Annual revenue growth of 18.2% over the past two years was outstanding, reflecting market share gains this cycle
- Forecasted revenue growth of 13% for the next 12 months indicates its momentum over the last two years is sustainable
- Earnings per share grew by 24.2% annually over the last two years, massively outpacing its peers
Casella Waste Systems’s stock price of $86.65 implies a valuation ratio of 75.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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 is 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
