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1 Cash-Producing Stock with Competitive Advantages and 2 That Underwhelm
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.
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 best left off your watchlist.
Two Stocks to Sell:
Monro (MNRO)
Trailing 12-Month Free Cash Flow Margin: 4.1%
Started as a single location in Rochester, New York, Monro (NASDAQ:MNRO) provides common auto services such as brake repairs, tire replacements, and oil changes.
Why Do We Steer Clear of MNRO?
- Ongoing store closures and lackluster same-store sales indicate sluggish demand and a focus on consolidation
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 29.9% annually, worse than its revenue
Monro is trading at $19.01 per share, or 34.4x forward P/E. Check out our free in-depth research report to learn more about why MNRO doesn’t pass our bar.
TransUnion (TRU)
Trailing 12-Month Free Cash Flow Margin: 13%
One of the three major credit bureaus in the United States alongside Equifax and Experian, TransUnion (NYSE:TRU) is a global information and insights company that provides credit reports, fraud prevention tools, and data analytics to help businesses make decisions and consumers manage their financial health.
Why Does TRU Fall Short?
- Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 3.5 percentage points
- 10 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
- ROIC of 5.9% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
At $83.36 per share, TransUnion trades at 17.7x forward P/E. If you’re considering TRU for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Travelers (TRV)
Trailing 12-Month Free Cash Flow Margin: 20.6%
Tracing its roots back to 1853 when it insured travelers against accidents on steamboats and railroads, Travelers (NYSE:TRV) provides a wide range of commercial and personal property and casualty insurance products to businesses, government units, associations, and individuals.
Why Are We Positive On TRV?
- 9.2% annualized net premiums earned expansion over the last two years exceeded the sector average as its policies appealed to customers
- Impressive 27.3% annual book value per share growth over the last two years indicates it’s building equity value this cycle
- Capital strength will likely rise over the next 12 months as its expected book value per share growth of 21% is robust
Travelers’s stock price of $283.35 implies a valuation ratio of 2x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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