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. 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:

Jamf (JAMF)

Trailing 12-Month Free Cash Flow Margin: 16%

With its name playfully derived from "Just Another Management Framework," Jamf (NASDAQ: JAMF) provides software that helps organizations deploy, manage, and secure Apple devices across their workforce while maintaining a seamless user experience.

Why Are We Cautious About JAMF?

1. Customers were hesitant to make long-term commitments to its software as its 12.2% average ARR growth over the last year was sluggish
2. Estimated sales growth of 9.6% for the next 12 months implies demand will slow from its two-year trend
3. Historical operating margin losses point to an inefficient cost structure

Jamf is trading at $12.86 per share, or 2.3x forward price-to-sales. If you’re considering JAMF for your portfolio, see our FREE research report to learn more.

Bread Financial (BFH)

Trailing 12-Month Free Cash Flow Margin: 52.1%

Formerly known as Alliance Data Systems until its 2022 rebranding, Bread Financial (NYSE: BFH) provides credit cards, installment loans, and savings products to consumers while powering branded payment solutions for retailers and merchants.

Why Should You Dump BFH?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 6.1% annually over the last two years
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

Bread Financial’s stock price of $59.97 implies a valuation ratio of 7.1x forward P/E. Check out our free in-depth research report to learn more about why BFH doesn’t pass our bar.

One Stock to Watch:

Parker-Hannifin (PH)

Trailing 12-Month Free Cash Flow Margin: 16.9%

Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.

Why Is PH on Our Radar?

1. Highly efficient business model is illustrated by its impressive 18.2% operating margin, and its rise over the last five years was fueled by some leverage on its fixed costs
2. Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Robust free cash flow margin of 14.8% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy

At $819.82 per share, Parker-Hannifin trades at 27.1x 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

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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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