A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Luckily for you, we built StockStory to help you separate the good from the bad. That said, here are two cash-producing companies that reinvest wisely to drive long-term success and one best left off your watchlist.
One Stock to Sell:
American Express Global Business Travel (GBTG)
Trailing 12-Month Free Cash Flow Margin: 5.9%
Originally spun off from American Express in 2014 but maintaining the Amex GBT brand, Global Business Travel Group (NYSE: GBTG) provides end-to-end business travel and expense management solutions, connecting corporate clients with travel suppliers and offering specialized software services.
Why Should You Dump GBTG?
- Sales trends were unexciting over the last two years as its 5.7% annual growth was well below the typical software company
- Estimated sales growth of 3.8% for the next 12 months implies demand will slow from its two-year trend
- Steep infrastructure costs and weaker unit economics for a software company are reflected in its low gross margin of 61.1%
At $7.86 per share, American Express Global Business Travel trades at 1.5x forward price-to-sales. Read our free research report to see why you should think twice about including GBTG in your portfolio.
Two Stocks to Buy:
Federal Signal (FSS)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE: FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies.
Why Are We Bullish on FSS?
- Annual revenue growth of 12.3% over the last five years was superb and indicates its market share increased during this cycle
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Additional sales over the last two years increased its profitability as the 27.9% annual growth in its earnings per share outpaced its revenue
Federal Signal is trading at $118.03 per share, or 26.1x 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.
Oscar Health (OSCR)
Trailing 12-Month Free Cash Flow Margin: 11.2%
Founded in 2012 to simplify the notoriously complex American healthcare system, Oscar Health (NYSE: OSCR) is a technology-focused health insurance company that offers individual and small group health plans through its cloud-native platform.
Why Is OSCR a Good Business?
- Impressive 47% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Adjusted operating margin expanded by 33.5 percentage points over the last five years as it scaled and became more efficient
- Earnings growth has massively outpaced its peers over the last four years as its EPS has compounded at 19.3% annually
Oscar Health’s stock price of $18.12 implies a valuation ratio of 0.4x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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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