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. 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:

Lindblad Expeditions (LIND)

Trailing 12-Month Free Cash Flow Margin: 8.4%

Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ: LIND) offers cruising experiences to remote destinations in partnership with National Geographic.

Why Does LIND Fall Short?

1. Subpar operating margin of 2.9% constrains its ability to invest in process improvements or effectively respond to new competitive threats
2. Earnings per share fell by 29.7% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Push for growth has led to negative returns on capital, signaling value destruction

At $13.35 per share, Lindblad Expeditions trades at 6.5x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than LIND.

Telephone and Data Systems (TDS)

Trailing 12-Month Free Cash Flow Margin: 6.8%

Operating primarily through its majority-owned subsidiary UScellular and wholly-owned TDS Telecom, Telephone and Data Systems (NYSE: TDS) provides wireless, broadband, video, and voice communications services to 4.6 million wireless and 1.2 million broadband customers across the United States.

Why Are We Out on TDS?

1. Annual sales declines of 1.6% for the past five years show its products and services struggled to connect with the market during this cycle
2. Earnings per share have contracted by 25.4% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. 26× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly

Telephone and Data Systems’s stock price of $40.25 implies a valuation ratio of 3.4x forward EV-to-EBITDA. If you’re considering TDS for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Tetra Tech (TTEK)

Trailing 12-Month Free Cash Flow Margin: 5.1%

With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ: TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.

Why Does TTEK Stand Out?

1. Impressive 20% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Demand is greater than supply as the company’s 15.6% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
3. $4.56 billion in revenue allows it to spread its fixed costs across a wider base

Tetra Tech is trading at $36.52 per share, or 25.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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

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