A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

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 excels at turning cash into shareholder value and two best left off your watchlist.

Two Stocks to Sell:

Paramount (PSKY)

Trailing 12-Month Free Cash Flow Margin: 1.8%

Owner of Spongebob Squarepants and formerly known as ViacomCBS, Paramount Global (NASDAQ: PARA) is a major media conglomerate offering television, film production, and digital content across various global platforms.

Why Do We Steer Clear of PSKY?

1. Annual revenue declines of 2% over the last two years indicate problems with its market positioning
2. Earnings per share fell by 15% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $17.39 per share, Paramount trades at 17.6x forward P/E. Dive into our free research report to see why there are better opportunities than PSKY.

Polaris (PII)

Trailing 12-Month Free Cash Flow Margin: 6.2%

Founded in 1954, Polaris (NYSE: PII) designs and manufactures high-performance off-road vehicles, snowmobiles, and motorcycles.

Why Is PII Risky?

1. Annual sales declines of 13% for the past two years show its products and services struggled to connect with the market
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 25.6% annually while its revenue grew
3. Eroding returns on capital suggest its historical profit centers are aging

Polaris’s stock price of $66 implies a valuation ratio of 141.4x forward P/E. Check out our free in-depth research report to learn more about why PII doesn’t pass our bar.

One Stock to Buy:

WisdomTree (WT)

Trailing 12-Month Free Cash Flow Margin: 28.9%

Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE: WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors.

Why Do We Love WT?

1. Annual revenue growth of 18.6% over the past two years was outstanding, reflecting market share gains this cycle
2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 62.9% annually, topping its revenue gains
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

WisdomTree is trading at $13.14 per share, or 15.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 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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