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 is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.

Two Stocks to Sell:

Udemy (UDMY)

Trailing 12-Month Free Cash Flow Margin: 8.9%

With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ: UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.

Why Does UDMY Give Us Pause?

1. Struggled with new customer acquisition as its monthly active buyers averaged 56.2% declines
2. Estimated sales growth of 2% for the next 12 months implies demand will slow from its three-year trend
3. Excessive marketing spend signals little organic demand and traction for its platform

Udemy’s stock price of $4.37 implies a valuation ratio of 3.3x forward EV/EBITDA. If you’re considering UDMY for your portfolio, see our FREE research report to learn more.

Mettler-Toledo (MTD)

Trailing 12-Month Free Cash Flow Margin: 21.1%

With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE: MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.

Why Are We Wary of MTD?

1. Sales trends were unexciting over the last two years as its 3.1% annual growth was below the typical healthcare company
2. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
3. Eroding returns on capital suggest its historical profit centers are aging

Mettler-Toledo is trading at $1,233 per share, or 27.3x forward P/E. Dive into our free research report to see why there are better opportunities than MTD.

One Stock to Watch:

Analog Devices (ADI)

Trailing 12-Month Free Cash Flow Margin: 38.8%

Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.

Why Are We Fans of ADI?

1. Annual revenue growth of 14.9% over the past five years was outstanding, reflecting market share gains this cycle
2. Offerings are difficult to replicate at scale and lead to a top-tier gross margin of 60.3%
3. Robust free cash flow margin of 36.7% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business

At $306.73 per share, Analog Devices trades at 26.2x 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.