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 that may struggle to keep up.
Two Stocks to Sell:
Advanced Energy (AEIS)
Trailing 12-Month Free Cash Flow Margin: 8.9%
Pioneering technologies for radio frequency power delivery, Advanced Energy (NASDAQ:AEIS) provides power supplies, thermal management systems, and measurement and control instruments for various manufacturing processes.
Why Should You Sell AEIS?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Efficiency has decreased over the last five years as its operating margin fell by 3.1 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $213.79 per share, Advanced Energy trades at 28.8x forward P/E. Check out our free in-depth research report to learn more about why AEIS doesn’t pass our bar.
D.R. Horton (DHI)
Trailing 12-Month Free Cash Flow Margin: 9.7%
One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.
Why Are We Cautious About DHI?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 15.5% declines over the past two years
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Eroding returns on capital suggest its historical profit centers are aging
D.R. Horton is trading at $164.95 per share, or 13.9x forward P/E. If you’re considering DHI for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Chipotle (CMG)
Trailing 12-Month Free Cash Flow Margin: 13.3%
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE:CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Why Are We Backing CMG?
- Fast expansion of new restaurants to reach markets with few or no locations is justified by its same-store sales growth
- Average same-store sales growth of 4.2% over the past two years indicates its restaurants are resonating with diners
- Unparalleled revenue scale of $11.79 billion gives it advantageous pricing and terms with suppliers
Chipotle’s stock price of $33.97 implies a valuation ratio of 29.3x 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
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 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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