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 best left off your watchlist.
Two Stocks to Sell:
Etsy (ETSY)
Trailing 12-Month Free Cash Flow Margin: 22.3%
Founded by a struggling amateur furniture maker Robert Kalin and his two friends, Etsy (NASDAQ:ETSY) is one of the world’s largest online marketplaces, focusing on handmade or vintage items.
Why Are We Hesitant About ETSY?
- Likely needs to improve its platform or increase its marketing budget for penetration to accelerate as its active buyers were flat over the last two years
- Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its three-year trend
- Performance over the past three years shows its incremental sales were much less profitable, as its earnings per share fell by 1.1% annually
Etsy is trading at $54.01 per share, or 9.7x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than ETSY.
Calavo (CVGW)
Trailing 12-Month Free Cash Flow Margin: 4.1%
A trailblazer in the avocado industry, Calavo Growers (NASDAQ:CVGW) is a pioneering California-based provider of high-quality avocados and other fresh food products.
Why Should You Sell CVGW?
- Sales tumbled by 17.2% annually over the last three years, showing consumer trends are working against its favor
- Smaller revenue base of $693.7 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Gross margin of 10.1% is an output of its commoditized products
Calavo’s stock price of $20.05 implies a valuation ratio of 11.7x forward P/E. If you’re considering CVGW for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
CRA (CRAI)
Trailing 12-Month Free Cash Flow Margin: 3.9%
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 Fans of CRAI?
- Market share has increased this cycle as its 9.7% annual revenue growth over the last two years was exceptional
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROIC punches in at 18.7%, illustrating management’s expertise in identifying profitable investments
At $176.34 per share, CRA trades at 20.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
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).
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 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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