Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here are three cash-producing companies that don’t make the cut and some better opportunities instead.
Cracker Barrel (CBRL)
Trailing 12-Month Free Cash Flow Margin: 1.7%
Known for its country-themed food and merchandise, Cracker Barrel (NASDAQ: CBRL) is a beloved American restaurant and retail chain that celebrates the warmth and charm of Southern hospitality.
Why Are We Out on CBRL?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Sales are projected to tank by 2.4% over the next 12 months as demand evaporates
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
At $37.31 per share, Cracker Barrel trades at 43.4x forward P/E. Dive into our free research report to see why there are better opportunities than CBRL.
Thermon (THR)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Is THR Not Exciting?
- Sales trends were unexciting over the last two years as its 4.3% annual growth was below the typical industrials company
- Anticipated sales growth of 3.6% for the next year implies demand will be shaky
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 4.3% annually
Thermon is trading at $27.39 per share, or 10.8x forward EV-to-EBITDA. Check out our free in-depth research report to learn more about why THR doesn’t pass our bar.
UFP Industries (UFPI)
Trailing 12-Month Free Cash Flow Margin: 2.7%
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
Why Do We Think UFPI Will Underperform?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
UFP Industries’s stock price of $93.26 implies a valuation ratio of 15.9x forward P/E. If you’re considering UFPI for your portfolio, see our FREE research report to learn more.
Stocks We Like More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. 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 Tecnoglass (+1,754% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
