While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are two cash-producing companies that excel at turning cash into shareholder value and one that may face some trouble.
One Stock to Sell:
Fiverr (FVRR)
Trailing 12-Month Free Cash Flow Margin: 26%
Based in Tel Aviv, Fiverr (NYSE:FVRR) operates a fixed price global freelance marketplace for digital services.
Why Are We Hesitant About FVRR?
- Active Buyers have declined by 9.4% annually over the last two years, suggesting it may need to revamp its features or user experience to stay competitive
- Estimated sales growth of 5.4% for the next 12 months implies demand will slow from its three-year trend
- High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
Fiverr is trading at $16.52 per share, or 1.8x forward EV/EBITDA. Check out our free in-depth research report to learn more about why FVRR doesn’t pass our bar.
Two Stocks to Buy:
Trane Technologies (TT)
Trailing 12-Month Free Cash Flow Margin: 13.2%
With low-pressure heating systems as its first product, Trane (NYSE:TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
Why Will TT Beat the Market?
- Annual revenue growth of 11.4% over the past five years was outstanding, reflecting market share gains this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 20.2% exceeded its revenue gains over the last two years
- Industry-leading 24.6% return on capital demonstrates management’s skill in finding high-return investments, and its rising returns show it’s making even more lucrative bets
Trane Technologies’s stock price of $436.25 implies a valuation ratio of 28.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
EVERTEC (EVTC)
Trailing 12-Month Free Cash Flow Margin: 23.3%
Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE:EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.
Why Is EVTC a Top Pick?
- Market share has increased this cycle as its 16.8% annual revenue growth over the last two years was exceptional
- Earnings per share have grown at a respectable 12.5% annual rate over the last five years, a bit better than the industry average
- Industry-leading 30.8% return on equity demonstrates management’s skill in finding high-return investments
At $28.51 per share, EVERTEC trades at 8.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.