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. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may face some trouble.

Two Stocks to Sell:

Hayward (HAYW)

Trailing 12-Month Free Cash Flow Margin: 20.3%

Credited with introducing the first variable-speed pool pump, Hayward (NYSE: HAYW) makes residential and commercial pool equipment and accessories.

Why Does HAYW Fall Short?

1. Sales trends were unexciting over the last five years as its 5.1% annual growth was below the typical industrials company
2. Estimated sales growth of 4.2% for the next 12 months implies demand will slow from its two-year trend
3. Earnings per share have contracted by 20.8% annually over the last four years, a headwind for returns as stock prices often echo long-term EPS performance

Hayward’s stock price of $13.98 implies a valuation ratio of 16.4x forward P/E. To fully understand why you should be careful with HAYW, check out our full research report (it’s free).

Scorpio Tankers (STNG)

Trailing 12-Month Free Cash Flow Margin: 46.2%

Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.

Why Are We Wary of STNG?

1. Sluggish trends in its total vessels suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Sales are projected to tank by 1.3% over the next 12 months as its demand continues evaporating
3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

At $75.49 per share, Scorpio Tankers trades at 11.9x forward P/E. If you’re considering STNG for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Upwork (UPWK)

Trailing 12-Month Free Cash Flow Margin: 28.3%

Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.

Why Could UPWK Be a Winner?

1. Customer spending is rising as the company has focused on monetization over the last two years, leading to 10.1% annual growth in its average revenue per customer
2. Additional sales over the last three years increased its profitability as the 197% annual growth in its earnings per share outpaced its revenue
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy

Upwork is trading at $11.23 per share, or 5.3x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.