1 Cash-Producing Stock with Solid Fundamentals and 2 Facing Challenges

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

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 leverages its financial strength to beat its competitors and two that may struggle to keep up.

Two Stocks to Sell:

Marcus & Millichap (MMI)

Trailing 12-Month Free Cash Flow Margin: 9.3%

Founded in 1971, Marcus & Millichap (NYSE:MMI) specializes in commercial real estate investment sales, financing, research, and advisory services.

Why Should You Dump MMI?

1. Lackluster 1.3% annual revenue growth over the last five years indicates the company is losing ground to competitors
2. Low free cash flow margin of 3% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

At $25.10 per share, Marcus & Millichap trades at 61.8x forward P/E. Read our free research report to see why you should think twice about including MMI in your portfolio.

Applied Industrial (AIT)

Trailing 12-Month Free Cash Flow Margin: 9.6%

Formerly called The Ohio Ball Bearing Company, Applied Industrial (NYSE:AIT) distributes industrial products–everything from power tools to industrial valves–and services to a wide variety of industries.

Why Are We Cautious About AIT?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Projected sales growth of 5.2% for the next 12 months suggests sluggish demand
3. Earnings per share lagged its peers over the last two years as they only grew by 5% annually

Applied Industrial is trading at $273.14 per share, or 24.4x forward P/E. Dive into our free research report to see why there are better opportunities than AIT.

One Stock to Watch:

Brady (BRC)

Trailing 12-Month Free Cash Flow Margin: 10.4%

Founded in 1914 and evolving through more than a century of industrial innovation, Brady (NYSE:BRC) manufactures and supplies identification solutions and workplace safety products that help companies identify and protect their premises, products, and people.

Why Are We Positive On BRC?

1. Solid 7.5% annual revenue growth over the last five years indicates its offering’s solve complex business issues
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 15.7% 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

Brady’s stock price of $88.76 implies a valuation ratio of 17x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.