A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may face some trouble.
Two Stocks to Sell:
MSCI (MSCI)
Trailing 12-Month Free Cash Flow Margin: 44.8%
Originally known as Morgan Stanley Capital International before becoming independent in 2007, MSCI (NYSE:MSCI) provides critical decision support tools, indexes, and analytics that help global investors understand risk and return factors and build more effective investment portfolios.
Why Does MSCI Worry Us?
- Negative return on equity shows that some of its growth strategies have backfired
MSCI’s stock price of $554.51 implies a valuation ratio of 26x forward P/E. If you’re considering MSCI for your portfolio, see our FREE research report to learn more.
Expro (XPRO)
Trailing 12-Month Free Cash Flow Margin: 7.2%
Operating in over 50 countries from deepwater offshore platforms to remote onshore fields, Expro (NYSE:XPRO) provides equipment and services that help oil and gas companies drill wells, measure production, and maintain well integrity.
Why Are We Hesitant About XPRO?
- Smaller revenue base of $1.55 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- High extraction costs and unfavorable asset economics are reflected in its low gross margin of 20.2%
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
At $16.46 per share, Expro trades at 13.1x forward P/E. Read our free research report to see why you should think twice about including XPRO in your portfolio.
One Stock to Buy:
Sterling (STRL)
Trailing 12-Month Free Cash Flow Margin: 14%
Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ:STRL) provides civil infrastructure construction.
Why Will STRL Outperform?
- Impressive 28.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
- Returns on capital are climbing as management makes more lucrative bets
Sterling is trading at $519 per share, or 22.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.