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 leverages its financial strength to beat its competitors and two best left off your watchlist.
Two Stocks to Sell:
Installed Building Products (IBP)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Why Does IBP Worry Us?
- Annual revenue growth of 2.4% over the last two years was below our standards for the industrials sector
- Estimated sales growth of 1.6% for the next 12 months is soft and implies weaker demand
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 2.6% annually
Installed Building Products is trading at $211.32 per share, or 20.9x forward P/E. Read our free research report to see why you should think twice about including IBP in your portfolio.
UFP Technologies (UFPT)
Trailing 12-Month Free Cash Flow Margin: 11.4%
With expertise dating back to 1963 in specialized materials and precision manufacturing, UFP Technologies (NASDAQ: UFPT) designs and manufactures custom solutions for medical devices, sterile packaging, and other highly engineered products for healthcare and industrial applications.
Why Are We Cautious About UFPT?
- Revenue base of $608.9 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Adjusted operating margin failed to increase over the last two years, indicating the company couldn’t optimize its expenses
UFP Technologies’s stock price of $227.47 implies a valuation ratio of 22.2x forward P/E. To fully understand why you should be careful with UFPT, check out our full research report (it’s free).
One Stock to Watch:
Cardinal Health (CAH)
Trailing 12-Month Free Cash Flow Margin: 1.8%
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE: CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Could CAH Be a Winner?
- Enormous revenue base of $250.7 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
- Sales outlook for the upcoming 12 months calls for 9% growth, an acceleration from its two-year trend
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 12.4% exceeded its revenue gains over the last five years
At $230.00 per share, Cardinal Health trades at 19.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.
