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. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Corcept (CORT)
Trailing 12-Month Free Cash Flow Margin: 25.8%
Focusing on the powerful stress hormone that affects everything from metabolism to immune function, Corcept Therapeutics (NASDAQ:CORT) develops and markets medications that modulate cortisol to treat endocrine disorders, cancer, and neurological diseases.
Why Does CORT Fall Short?
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 16.2 percentage points
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 3% annually
- 16.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Corcept is trading at $72.27 per share, or 35.8x forward P/E. To fully understand why you should be careful with CORT, check out our full research report (it’s free).
Brink's (BCO)
Trailing 12-Month Free Cash Flow Margin: 1.4%
Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE:BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.
Why Does BCO Give Us Pause?
- Sales trends were unexciting over the last two years as its 4% annual growth was below the typical business services company
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.4 percentage points
- Underwhelming 12.7% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $94.46 per share, Brink's trades at 12.6x forward P/E. Check out our free in-depth research report to learn more about why BCO doesn’t pass our bar.
One Stock to Buy:
Chipotle (CMG)
Trailing 12-Month Free Cash Flow Margin: 12.9%
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Why Is CMG a Top Pick?
- Rapid rollout of new restaurants to capitalize on market opportunities makes sense given its strong same-store sales performance
- Customers are lining up to eat at its restaurants as the company’s same-store sales growth averaged 6.2% over the past two years
- Enormous revenue base of $11.49 billion provides significant leverage in supplier negotiations
Chipotle’s stock price of $57.07 implies a valuation ratio of 43.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 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-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