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. 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 Industrials Stocks to Sell:
WillScot Mobile Mini (WSC)
Trailing 12-Month Free Cash Flow Margin: 17.3%
Originally focusing on mobile offices for construction sites, WillScot (NASDAQ: WSC) provides ready-to-use temporary spaces, largely for longer-term lease.
Why Do We Think Twice About WSC?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Earnings per share have dipped by 10.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 6.9 percentage points
WillScot Mobile Mini’s stock price of $22.16 implies a valuation ratio of 17.1x forward P/E. If you’re considering WSC for your portfolio, see our FREE research report to learn more.
Allient (ALNT)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Founded in 1962, Allient (NASDAQ: ALNT) develops and manufactures precision and specialty-controlled motion components and systems.
Why Are We Wary of ALNT?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.5% annually over the last two years
- Issuance of new shares over the last two years caused its earnings per share to fall by 12.6% annually, even worse than its revenue declines
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Allient is trading at $58.50 per share, or 27x forward P/E. To fully understand why you should be careful with ALNT, check out our full research report (it’s free for active Edge members).
One Industrials Stock to Watch:
Parsons (PSN)
Trailing 12-Month Free Cash Flow Margin: 7.8%
Delivering aerospace technology during the Cold War-era, Parsons (NYSE: PSN) offers engineering, construction, and cybersecurity solutions for the infrastructure and defense sectors.
Why Could PSN Be a Winner?
- Annual revenue growth of 18.4% over the past two years was outstanding, reflecting market share gains this cycle
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Rising returns on capital show the company is starting to reap the benefits of its past investments
At $84.40 per share, Parsons trades at 25.1x 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
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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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