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.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here is one cash-producing company that reinvests wisely to drive long-term success and two that may struggle to keep up.

Two Stocks to Sell:

Best Buy (BBY)

Trailing 12-Month Free Cash Flow Margin: 3%

With humble beginnings as a stereo equipment seller, Best Buy (NYSE: BBY) now sells a broad selection of consumer electronics, appliances, and home office products.

Why Is BBY Not Exciting?

1. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
2. Gross margin of 22.4% is an output of its commoditized inventory
3. Subpar operating margin of 3.3% constrains its ability to invest in process improvements or effectively respond to new competitive threats

Best Buy’s stock price of $71.80 implies a valuation ratio of 11.5x forward P/E. If you’re considering BBY for your portfolio, see our FREE research report to learn more.

LeMaitre (LMAT)

Trailing 12-Month Free Cash Flow Margin: 22.3%

Founded in 1983 and named after a pioneering vascular surgeon, LeMaitre Vascular (NASDAQGM:LMAT) develops and manufactures specialized medical devices used by vascular surgeons to treat peripheral vascular disease and other circulatory conditions.

Why Are We Hesitant About LMAT?

1. Subscale operations are evident in its revenue base of $234.6 million, meaning it has fewer distribution channels than its larger rivals
2. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 2.3 percentage points
3. 4.3 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $95.04 per share, LeMaitre trades at 41.1x forward P/E. To fully understand why you should be careful with LMAT, check out our full research report (it’s free).

One Stock to Watch:

Abbott Laboratories (ABT)

Trailing 12-Month Free Cash Flow Margin: 15.7%

With roots dating back to 1888 when founder Dr. Wallace Abbott began producing precise, dosage-form medications, Abbott Laboratories (NYSE: ABT) develops and sells a diverse range of healthcare products including medical devices, diagnostics, nutrition products, and branded generic pharmaceuticals.

Why Is ABT Interesting?

1. Economies of scale in a highly regulated sector make the company difficult to replace, giving it meaningful negotiating power
2. Share repurchases have increased shareholder returns as its annual earnings per share growth of 10.2% exceeded its revenue gains over the last five years
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

Abbott Laboratories is trading at $130.35 per share, or 24x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.