A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two best left off your watchlist.

Two Stocks to Sell:

Dole (DOLE)

Trailing 12-Month Free Cash Flow Margin: 1.2%

Known for its delicious pineapples and Hawaiian roots, Dole (NYSE: DOLE) is a global agricultural company specializing in fresh fruits and vegetables.

Why Do We Pass on DOLE?

1. Annual revenue declines of 2% over the last three years indicate problems with its market positioning
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.9%
3. Gross margin of 8.4% is an output of its commoditized products

Dole is trading at $14.59 per share, or 10.6x forward P/E. To fully understand why you should be careful with DOLE, check out our full research report (it’s free).

CTS (CTS)

Trailing 12-Month Free Cash Flow Margin: 16.8%

With roots dating back to 1896 and a global manufacturing footprint, CTS (NYSE: CTS) designs and manufactures sensors, connectivity components, and actuators for aerospace, defense, industrial, medical, and transportation markets.

Why Does CTS Fall Short?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 5.7% annually over the last two years
2. Revenue base of $520.9 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
3. Earnings per share have dipped by 4.5% annually over the past two years, which is concerning because stock prices follow EPS over the long term

At $39.11 per share, CTS trades at 16.1x forward P/E. If you’re considering CTS for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

RBC Bearings (RBC)

Trailing 12-Month Free Cash Flow Margin: 15.6%

With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE: RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.

Why Should RBC Be on Your Watchlist?

1. Annual revenue growth of 18.9% over the past five years was outstanding, reflecting market share gains this cycle
2. Exciting sales outlook for the upcoming 12 months calls for 14.7% growth, an acceleration from its two-year trend
3. Healthy operating margin of 20.2% shows it’s a well-run company with efficient processes, and its rise over the last five years was fueled by some leverage on its fixed costs

RBC Bearings’s stock price of $399.85 implies a valuation ratio of 34.2x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

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 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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