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 are two cash-producing companies that excel at turning cash into shareholder value and one best left off your watchlist.
One Stock to Sell:
Autoliv (ALV)
Trailing 12-Month Free Cash Flow Margin: 6.9%
With products estimated to save over 30,000 lives annually in traffic accidents worldwide, Autoliv (NYSE: ALV) develops and manufactures passive safety systems for vehicles, including airbags, seatbelts, and steering wheels that protect occupants during crashes.
Why Are We Hesitant About ALV?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 2.4% for the last two years
- Projected sales growth of 4.7% for the next 12 months suggests sluggish demand
- Gross margin of 17.8% is below its competitors, leaving less money to invest in areas like marketing and R&D
Autoliv’s stock price of $117.49 implies a valuation ratio of 11.1x forward P/E. To fully understand why you should be careful with ALV, check out our full research report (it’s free).
Two Stocks to Watch:
HubSpot (HUBS)
Trailing 12-Month Free Cash Flow Margin: 18.6%
Born from the idea that traditional interruptive marketing was becoming less effective, HubSpot (NYSE: HUBS) provides an integrated platform that helps businesses attract, engage, and manage customer relationships through marketing, sales, service, and content management tools.
Why Are We Positive on HUBS?
- Billings have averaged 22.3% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Superior software functionality and low servicing costs are reflected in its stellar gross margin of 83.7%
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
At $204.70 per share, HubSpot trades at 2.8x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Standex (SXI)
Trailing 12-Month Free Cash Flow Margin: 6.1%
Holding over 500 patents globally, Standex (NYSE: SXI) is a manufacturer and distributor of industrial components for various sectors.
Why Is SXI Interesting?
- Annual revenue growth of 10.2% over the last two years beat the sector average and underscores the unique value of its offerings
- Excellent operating margin of 15.2% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
Standex is trading at $303.65 per share, or 32.1x 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 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
