1 Cash-Producing Stock to Own for Decades and 2 Facing Headwinds

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 face some trouble.

Two Stocks to Sell:

ACV Auctions (ACVA)

Trailing 12-Month Free Cash Flow Margin: 6.2%

Founded in 2014, ACV Auctions (NASDAQ:ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.

Why Are We Cautious About ACVA?

1. High servicing costs result in an inferior gross margin of 27.4% that must be offset through higher volumes
2. High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum
3. Poor free cash flow margin of 4.1% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

ACV Auctions’s stock price of $6.75 implies a valuation ratio of 17.2x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than ACVA.

Thermo Fisher (TMO)

Trailing 12-Month Free Cash Flow Margin: 14%

With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE:TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.

Why Does TMO Fall Short?

1. Sales were flat over the last two years, indicating it’s failed to expand this cycle
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 9.2 percentage points

Thermo Fisher is trading at $586.42 per share, or 24.4x forward P/E. Check out our free in-depth research report to learn more about why TMO doesn’t pass our bar.

One Stock to Buy:

RB Global (RBA)

Trailing 12-Month Free Cash Flow Margin: 12.7%

Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE:RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries.

Why Will RBA Outperform?

1. Market share has increased this cycle as its 21.2% annual revenue growth over the last two years was exceptional
2. Earnings per share grew by 18.7% annually over the last five years, massively outpacing its peers
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

At $96.22 per share, RB Global trades at 23.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.

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

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