1 Cash-Producing Stock on Our Buy List and 2 We Turn Down

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.

Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here is one cash-producing company that excels at turning cash into shareholder value and two that may struggle to keep up.

Two Stocks to Sell:

MGM Resorts (MGM)

Trailing 12-Month Free Cash Flow Margin: 8.3%

Operating several properties on the Las Vegas Strip, MGM Resorts (NYSE:MGM) is a global hospitality and entertainment company known for its resorts and casinos.

Why Should You Sell MGM?

1. Annual sales growth of 4.2% over the last two years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
2. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
3. High net-debt-to-EBITDA ratio of 12× could force the company to raise capital at unfavorable terms if market conditions deteriorate

MGM Resorts is trading at $37.51 per share, or 17.3x forward P/E. Read our free research report to see why you should think twice about including MGM in your portfolio.

Ryder (R)

Trailing 12-Month Free Cash Flow Margin: 3.6%

As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE:R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.

Why Do We Think Twice About R?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 3.7% for the last two years
2. Earnings per share were flat over the last two years and fell short of the peer group average
3. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value

Ryder’s stock price of $223.08 implies a valuation ratio of 15.6x forward P/E. Dive into our free research report to see why there are better opportunities than R.

One Stock to Buy:

SentinelOne (S)

Trailing 12-Month Free Cash Flow Margin: 4.7%

Built on the principle of "fighting machine with machine," SentinelOne (NYSE:S) provides an AI-powered cybersecurity platform that autonomously prevents, detects, and responds to threats across endpoints, cloud workloads, and identity systems.

Why Will S Beat the Market?

1. ARR growth averaged 24.6% over the last year, showing customers are willing to take multi-year bets on its software
2. Forecasted revenue growth of 20.1% for the next 12 months indicates its momentum over the last two years is sustainable
3. Free cash flow margin is forecasted to grow by 3.4 percentage points in the coming year, potentially giving the company more chips to play with

At $13.38 per share, SentinelOne trades at 3.7x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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 Growth Stocks for this month. 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.