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. That said, here are two cash-producing companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
WEX (WEX)
Trailing 12-Month Free Cash Flow Margin: 11.8%
Originally founded in 1983 as Wright Express to serve the fleet card market, WEX (NYSE: WEX) provides payment processing and business solutions across fleet management, employee benefits, and corporate payments sectors.
Why Does WEX Give Us Pause?
- Annual revenue growth of 2.2% over the last two years was below our standards for the financials sector
- Earnings per share lagged its peers over the last two years as they only grew by 4.5% annually
WEX is trading at $157.61 per share, or 8.7x forward P/E. Check out our free in-depth research report to learn more about why WEX doesn’t pass our bar.
Two Stocks to Buy:
JFrog (FROG)
Trailing 12-Month Free Cash Flow Margin: 26.8%
Named after the amphibian that continuously evolves from egg to tadpole to adult, JFrog (NASDAQ: FROG) provides a platform that helps organizations securely create, store, manage, and distribute software packages across any system.
Why Should You Buy FROG?
- Ability to secure long-term commitments with customers is evident in its 23.6% ARR growth over the last year
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Robust free cash flow margin of 26.8% gives it many options for capital deployment
JFrog’s stock price of $50.00 implies a valuation ratio of 10.1x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Netflix (NFLX)
Trailing 12-Month Free Cash Flow Margin: 20.9%
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Why Is NFLX a Top Pick?
- Global Streaming Paid Memberships have increased by an average of 15.7% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 29.8%, and its rise over the last few years was fueled by some leverage on its fixed costs
- Free cash flow margin expanded by 15.8 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
At $76.95 per share, Netflix trades at 19.6x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
