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 is one cash-producing company that leverages its financial strength to beat its competitors and two that may face some trouble.
Two Stocks to Sell:
Nature's Sunshine (NATR)
Trailing 12-Month Free Cash Flow Margin: 3.8%
Started on a kitchen table in Utah, Nature’s Sunshine (NASDAQ: NATR) manufactures and sells nutritional and personal care products.
Why Does NATR Give Us Pause?
- Sales stagnated over the last three years and signal the need for new growth strategies
- Modest revenue base of $456.6 million gives it less fixed cost leverage and fewer distribution channels than larger companies
Nature's Sunshine’s stock price of $14.47 implies a valuation ratio of 19x forward P/E. Dive into our free research report to see why there are better opportunities than NATR.
Resideo (REZI)
Trailing 12-Month Free Cash Flow Margin: 4.1%
Resideo Technologies, Inc. (NYSE: REZI) is a manufacturer and distributor of technology-driven products and solutions for home comfort, energy management, water management, and safety and security.
Why Does REZI Worry Us?
- Sales trends were unexciting over the last two years as its 4.8% annual growth was below the typical industrials company
- Anticipated sales growth of 4.4% for the next year implies demand will be shaky
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $21.32 per share, Resideo trades at 5.2x forward EV-to-EBITDA. If you’re considering REZI for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Thermon (THR)
Trailing 12-Month Free Cash Flow Margin: 10.6%
Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Could THR Be a Winner?
- Offerings are mission-critical for businesses and result in a premier gross margin of 42.8%
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 20.8% over the last five years outstripped its revenue performance
Thermon is trading at $27.27 per share, or 13.4x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.
