A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.
Two Stocks to Sell:
Ralph Lauren (RL)
Trailing 12-Month Free Cash Flow Margin: 10.5%
Originally founded as a necktie company, Ralph Lauren (NYSE:RL) is an iconic American fashion brand known for its classic and sophisticated style.
Why Do We Think Twice About RL?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Projected sales growth of 5.4% for the next 12 months suggests sluggish demand
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 1.5 percentage points
Ralph Lauren is trading at $315 per share, or 22x forward P/E. Dive into our free research report to see why there are better opportunities than RL.
SiteOne (SITE)
Trailing 12-Month Free Cash Flow Margin: 4.2%
Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE:SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies.
Why Are We Cautious About SITE?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 12.2% annually
- Diminishing returns on capital suggest its earlier profit pools are drying up
SiteOne’s stock price of $136.35 implies a valuation ratio of 32.8x forward P/E. To fully understand why you should be careful with SITE, check out our full research report (it’s free).
One Stock to Buy:
Elevance Health (ELV)
Trailing 12-Month Free Cash Flow Margin: 2.8%
Formerly known as Anthem until its 2022 rebranding, Elevance Health (NYSE:ELV) is one of America's largest health insurers, serving approximately 47 million medical members through its network-based managed care plans.
Why Do We Love ELV?
- Enormous revenue base of $188.2 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- Forecasted revenue growth of 7.6% for the next 12 months suggests stronger momentum versus most peers
- ROIC punches in at 27.1%, illustrating management’s expertise in identifying profitable investments
At $315 per share, Elevance Health trades at 8.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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