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 are two cash-producing companies that reinvest wisely to drive long-term success and one that may face some trouble.
One Stock to Sell:
ACV Auctions (ACVA)
Trailing 12-Month Free Cash Flow Margin: 7.9%
Founded in 2014, ACV Auctions (NASDAQ:ACVA) is an online auction marketplace for car dealers and wholesalers to buy and sell used cars.
Why Does ACVA Fall Short?
- Bad unit economics and steep infrastructure costs are reflected in its low gross margin of 25.1%
- Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.3% for the last two years
ACV Auctions is trading at $14.58 per share, or 27.3x forward EV/EBITDA. Check out our free in-depth research report to learn more about why ACVA doesn’t pass our bar.
Two Stocks to Buy:
Monolithic Power Systems (MPWR)
Trailing 12-Month Free Cash Flow Margin: 26.2%
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ:MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Is MPWR a Good Business?
- Annual revenue growth of 13.1% over the last two years was superb and indicates its market share increased during this cycle
- Strong free cash flow margin of 29.2% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Monolithic Power Systems’s stock price of $715.09 implies a valuation ratio of 41.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Celsius (CELH)
Trailing 12-Month Free Cash Flow Margin: 15.5%
With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ:CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.
Why Are We Backing CELH?
- Annual revenue growth of 49.5% over the last three years was superb and indicates its market share is rising
- Earnings growth has trumped its peers over the last three years as its EPS has compounded at 77.6% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $46.80 per share, Celsius trades at 44x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
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