A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
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 leverages its financial strength to beat its competitors and two that may struggle to keep up.
Two Stocks to Sell:
Grand Canyon Education (LOPE)
Trailing 12-Month Free Cash Flow Margin: 21.6%
Founded in 1949, Grand Canyon Education (NASDAQ: LOPE) is an educational services provider known for its operation at Grand Canyon University.
Why Are We Out on LOPE?
- Demand for its offerings was relatively low as its number of students has underwhelmed
- Earnings per share lagged its peers over the last five years as they only grew by 7.2% annually
- Forecasted free cash flow margin suggests the company will fail to improve its cash conversion over the next year
Grand Canyon Education is trading at $164.07 per share, or 16.3x forward P/E. If you’re considering LOPE for your portfolio, see our FREE research report to learn more.
GE HealthCare (GEHC)
Trailing 12-Month Free Cash Flow Margin: 7.3%
Spun off from industrial giant General Electric in 2023 after over a century as its healthcare division, GE HealthCare (NASDAQ: GEHC) provides medical imaging equipment, patient monitoring systems, diagnostic pharmaceuticals, and AI-enabled healthcare solutions to hospitals and clinics worldwide.
Why Are We Hesitant About GEHC?
- The company has faced growth challenges as its 2.7% annual revenue increases over the last two years fell short of other healthcare companies
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
At $70.68 per share, GE HealthCare trades at 13.9x forward P/E. To fully understand why you should be careful with GEHC, check out our full research report (it’s free).
One Stock to Buy:
Arthur J. Gallagher (AJG)
Trailing 12-Month Free Cash Flow Margin: 12.8%
Founded in 1927 and operating in approximately 130 countries through direct operations and correspondent networks, Arthur J. Gallagher (NYSE: AJG) provides insurance brokerage, reinsurance, consulting, and third-party claims settlement services to businesses and individuals worldwide.
Why Are We Bullish on AJG?
- Impressive 17.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings per share have massively outperformed its peers over the last five years, increasing by 17.7% annually
- AJG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Arthur J. Gallagher’s stock price of $207.89 implies a valuation ratio of 15.4x forward P/E. Is now the right time to buy? 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
