1 cash-producing stock for long-term investors and 2 we find risky

Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.

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 excels at turning cash into shareholder value and two that may face some trouble.

Two stocks to sell:

Progyny (PGNY)

Trailing 12-month free cash flow margin: 13.6%

Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ:PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.

Why Do We Think Twice About PGNY?

1. Weak unit sales over the past two years show it's struggled to increase its sales volumes and had to rely on price increases

2. Smaller revenue base of $1.31 billion means it hasn't achieved the economies of scale that some industry juggernauts enjoy

3. Adjusted operating margin was unchanged over the last two years, suggesting it failed to gain leverage on its fixed costs

Progyny is trading at $27.77 per share, or 12.9x forward P/E. Read our free research report to see why you should think twice about including PGNY in your portfolio, it's free .

Goodyear (GT)

Trailing 12-month free cash flow margin: 1.1%

With its iconic blimp floating above major sporting events since 1925, Goodyear (NASDAQ:GT) is one of the world's largest tire manufacturers, producing and selling tires for automobiles, trucks, aircraft, and other vehicles, along with related services.

Why Do We Pass on GT?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 4.5% annually over the last two years

2. Issuance of new shares over the last five years caused its earnings per share to fall by 17.7% annually while its revenue grew

3. Cash burn makes us question whether it can achieve sustainable long-term growth

At $4.41 per share, Goodyear trades at 0.1x forward price-to-sales. Dive into our free research report to see why there are better opportunities than GT .

One stock to buy:

APA Corporation (APA)

Trailing 12-month free cash flow margin: 23.7%

Operating in three continents with a history stretching back to 1954, APA Corporation (NASDAQ:APA) explores for, develops, and produces crude oil, natural gas, and natural gas liquids in the U.S., Egypt, and the U.K. North Sea.