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.
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 best left off your watchlist.
Two Stocks to Sell:
AMC Networks (AMCX)
Trailing 12-Month Free Cash Flow Margin: 11.8%
Originally the joint-venture of four cable television companies, AMC Networks (NASDAQ: AMCX) is a broadcaster producing a diverse range of television shows and movies.
Why Should You Sell AMCX?
- Products and services have few die-hard fans as sales have declined by 4.6% annually over the last five years
- Sales were less profitable over the last five years as its earnings per share fell by 16.4% annually, worse than its revenue declines
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
AMC Networks is trading at $6 per share, or 2x forward P/E. If you’re considering AMCX for your portfolio, see our FREE research report to learn more.
Hologic (HOLX)
Trailing 12-Month Free Cash Flow Margin: 24.7%
As a pioneer in 3D mammography technology that has revolutionized breast cancer detection, Hologic (NASDAQ: HOLX) develops and manufactures diagnostic products, medical imaging systems, and surgical devices focused primarily on women's health and wellness.
Why Does HOLX Give Us Pause?
- Constant currency revenue growth has disappointed over the past two years and shows demand was soft
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 23.2 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $65 per share, Hologic trades at 14.5x forward P/E. Read our free research report to see why you should think twice about including HOLX in your portfolio.
One Stock to Buy:
BellRing Brands (BRBR)
Trailing 12-Month Free Cash Flow Margin: 7.2%
Spun out of Post Holdings in 2019, Bellring Brands (NYSE: BRBR) offers protein shakes, nutrition bars, and other products under the PowerBar, Premier Protein, and Dymatize brands.
Why Will BRBR Beat the Market?
- Products are flying off the shelves as its unit sales averaged 20.8% growth over the past two years
- Earnings per share grew by 28% annually over the last three years and trumped its peers
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
BellRing Brands’s stock price of $58.78 implies a valuation ratio of 24.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. 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
