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華爾街日報1 Cash-Producing Stock to Consider Right Now and 2 We Avoid
A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
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 leverages its financial strength to beat its competitors and two that may face some trouble.
Two Stocks to Sell:
Werner (WERN)
Trailing 12-Month Free Cash Flow Margin: 2.3%
Conducting business in over a 100 countries, Werner (NASDAQ:WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.
Why Do We Think WERN Will Underperform?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.1% annually over the last two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 55.8% annually
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Werner’s stock price of $30.51 implies a valuation ratio of 50.3x forward P/E. Dive into our free research report to see why there are better opportunities than WERN.
The Pennant Group (PNTG)
Trailing 12-Month Free Cash Flow Margin: 4.3%
Spun off from The Ensign Group in 2019 to focus on non-skilled nursing healthcare services, Pennant Group (NASDAQ:PNTG) operates home health, hospice, and senior living facilities across 13 western and midwestern states, serving patients of all ages including seniors.
Why Are We Hesitant About PNTG?
- Revenue base of $842.2 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Low free cash flow margin of 1.4% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- ROIC of 6% reflects management’s challenges in identifying attractive investment opportunities
At $27.80 per share, The Pennant Group trades at 22x forward P/E. Read our free research report to see why you should think twice about including PNTG in your portfolio.
One Stock to Watch:
Vita Coco (COCO)
Trailing 12-Month Free Cash Flow Margin: 8.7%
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ:COCO) offers coconut water products that are a natural way to quench thirst.
Why Does COCO Catch Our Eye?
- Products are flying off the shelves as its unit sales averaged 10.8% growth over the past two years
- Earnings per share have massively outperformed its peers over the last three years, increasing by 89.3% annually
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
Vita Coco is trading at $53 per share, or 36.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
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 9 Market-Beating Stocks. 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-micro-cap company Tecnoglass (+1,754% 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.