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.
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 best left off your watchlist.
Two Stocks to Sell:
Entegris (ENTG)
Trailing 12-Month Free Cash Flow Margin: 12.4%
With fabs representing the company’s largest customer type, Entegris (NASDAQ: ENTG) supplies products that purify, protect, and generally ensure the integrity of raw materials needed for advanced semiconductor manufacturing.
Why Are We Hesitant About ENTG?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.8% annually over the last two years
- Projected sales growth of 7.1% for the next 12 months suggests sluggish demand
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its decreasing returns suggest its historical profit centers are aging
At $131.34 per share, Entegris trades at 40.3x forward P/E. Read our free research report to see why you should think twice about including ENTG in your portfolio.
Allstate (ALL)
Trailing 12-Month Free Cash Flow Margin: 15%
Born from a Sears, Roebuck & Co. initiative during the Great Depression with its famous "You're in good hands" slogan, Allstate (NYSE: ALL) is one of America's largest personal property and casualty insurers, offering protection for autos, homes, and personal property.
Why Are We Wary of ALL?
- Estimated sales growth of 1.9% for the next 12 months implies demand will slow from its two-year trend
- Annual book value per share growth of 3.4% over the last five years lagged behind its insurance peers as its large balance sheet made it difficult to generate incremental capital growth
Allstate’s stock price of $203.80 implies a valuation ratio of 1.6x forward P/B. Check out our free in-depth research report to learn more about why ALL doesn’t pass our bar.
One Stock to Watch:
ITT (ITT)
Trailing 12-Month Free Cash Flow Margin: 14.1%
Playing a crucial role in the development of the first transatlantic television transmission in 1956, ITT (NYSE: ITT) provides motion and fluid handling equipment for various industries
Why Do We Like ITT?
- 9.7% annual revenue growth over the last five years surpassed the sector average as its offerings resonated with customers
- Excellent operating margin of 17.2% highlights the efficiency of its business model
- Free cash flow margin increased by 17.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
ITT is trading at $199.10 per share, or 27.9x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
