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. 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:
Reynolds (REYN)
Trailing 12-Month Free Cash Flow Margin: 8.5%
Best known for its aluminum foil, Reynolds (NASDAQ: REYN) is a household products company whose products focus on food storage, cooking, and waste.
Why Do We Avoid REYN?
- Flat unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Gross margin of 25.2% is an output of its commoditized products
At $26.23 per share, Reynolds trades at 16.1x forward P/E. If you’re considering REYN for your portfolio, see our FREE research report to learn more.
DXC (DXC)
Trailing 12-Month Free Cash Flow Margin: 7.4%
Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.
Why Are We Bearish on DXC?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Earnings per share were flat over the last five years and fell short of the peer group average
- Low returns on capital reflect management’s struggle to allocate funds effectively
DXC is trading at $10.66 per share, or 4x forward P/E. Check out our free in-depth research report to learn more about why DXC doesn’t pass our bar.
One Stock to Watch:
W.W. Grainger (GWW)
Trailing 12-Month Free Cash Flow Margin: 8%
Founded as a supplier of motors, W.W. Grainger (NYSE: GWW) provides maintenance, repair, and operating (MRO) supplies and services to businesses and institutions.
Why Could GWW Be a Winner?
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 14.8%, and its operating leverage amplified its profits over the last five years
- Share repurchases over the last five years enabled its annual earnings per share growth of 20.7% to outpace its revenue gains
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
W.W. Grainger’s stock price of $1,305 implies a valuation ratio of 26.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
