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.
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 reinvests wisely to drive long-term success and two best left off your watchlist.
Two Stocks to Sell:
BlackLine (BL)
Trailing 12-Month Free Cash Flow Margin: 19.3%
Born from the vision to eliminate tedious manual spreadsheet work for accountants, BlackLine (NASDAQ: BL) provides cloud-based software that automates and streamlines financial close, intercompany accounting, and invoice-to-cash processes for accounting departments.
Why Does BL Give Us Pause?
- Products, pricing, or go-to-market strategy may need some adjustments as its 8.5% average billings growth over the last year was weak
- Struggled to drive increased usage of its software, demonstrated by its subpar 104% net revenue retention rate
- Static operating margin over the last year shows it couldn’t become more efficient
BlackLine’s stock price of $38.06 implies a valuation ratio of 3.6x forward price-to-sales. To fully understand why you should be careful with BL, check out our full research report (it’s free).
United Parks & Resorts (PRKS)
Trailing 12-Month Free Cash Flow Margin: 13.2%
Parent company of SeaWorld and home of the world-famous Shamu, United Parks & Resorts (NYSE: PRKS) is a theme park chain featuring marine life, live entertainment, roller coasters, and waterparks.
Why Do We Think PRKS Will Underperform?
- Demand for its offerings was relatively low as its number of visitors has underwhelmed
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $33.96 per share, United Parks & Resorts trades at 8.8x forward P/E. Dive into our free research report to see why there are better opportunities than PRKS.
One Stock to Watch:
Inter Parfums (IPAR)
Trailing 12-Month Free Cash Flow Margin: 12.4%
With licenses to produce colognes and perfumes under brands such as Kate Spade, Van Cleef & Arpels, and Abercrombie & Fitch, Inter Parfums (NASDAQ: IPAR) manufactures and distributes fragrances worldwide.
Why Do We Like IPAR?
- Solid 14.1% annual revenue growth over the last three years underscores its brand’s appeal to consumers
- Unique products and pricing power are reflected in its stellar gross margin of 56%
- ROIC punches in at 28.5%, illustrating management’s expertise in identifying profitable investments
Inter Parfums is trading at $102.24 per share, or 21.3x forward P/E. Is now the right time to buy? Find out 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
