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. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two best left off your watchlist.
Two Stocks to Sell:
American Woodmark (AMWD)
Trailing 12-Month Free Cash Flow Margin: 3.7%
Starting as a small millwork shop, American Woodmark (NASDAQ:AMWD) is a cabinet manufacturing company that helps customers from inspiration to installation.
Why Should You Sell AMWD?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Forecasted revenue decline of 3.5% for the upcoming 12 months implies demand will fall even further
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
American Woodmark’s stock price of $54.89 implies a valuation ratio of 26.4x forward P/E. Dive into our free research report to see why there are better opportunities than AMWD.
Worthington (WOR)
Trailing 12-Month Free Cash Flow Margin: 13%
Founded by a steel salesman, Worthington (NYSE:WOR) specializes in steel processing, pressure cylinders, and engineered cabs for commercial markets.
Why Should You Dump WOR?
- Annual sales declines of 16.2% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings per share have contracted by 27.4% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Worthington is trading at $55.25 per share, or 14.9x forward P/E. If you’re considering WOR for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Ross Stores (ROST)
Trailing 12-Month Free Cash Flow Margin: 8.9%
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ:ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Does ROST Catch Our Eye?
- Fast expansion of new stores to reach markets with few or no locations is justified by its same-store sales growth
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 3.4% over the past two years
- Industry-leading 30.6% return on capital demonstrates management’s skill in finding high-return investments
At $177.81 per share, Ross Stores trades at 25.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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 5 Growth Stocks for this month. 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-small-cap company Comfort Systems (+782% 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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