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:
Jamf (JAMF)
Trailing 12-Month Free Cash Flow Margin: 9.7%
With its name playfully derived from "Just Another Management Framework," Jamf (NASDAQ: JAMF) provides software that helps organizations deploy, manage, and secure Apple devices across their workforce while maintaining a seamless user experience.
Why Do We Think Twice About JAMF?
- Revenue increased by 16.3% annually over the last three years, acceptable on an absolute basis but tepid for a software company enjoying secular tailwinds
- Poor expense management has led to operating margin losses
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
Jamf is trading at $10.59 per share, or 1.9x forward price-to-sales. Read our free research report to see why you should think twice about including JAMF in your portfolio.
Repligen (RGEN)
Trailing 12-Month Free Cash Flow Margin: 16.2%
With over 13 strategic acquisitions since 2012 to build its comprehensive bioprocessing portfolio, Repligen (NASDAQ: RGEN) develops and manufactures specialized technologies that improve the efficiency and flexibility of biological drug manufacturing processes.
Why Are We Out on RGEN?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 16.9 percentage points
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $115 per share, Repligen trades at 59.8x forward P/E. Dive into our free research report to see why there are better opportunities than RGEN.
One Stock to Watch:
Paychex (PAYX)
Trailing 12-Month Free Cash Flow Margin: 31.6%
Once known as the go-to service for small business payroll needs, Paychex (NASDAQ: PAYX) provides payroll processing, HR services, employee benefits administration, and insurance solutions to small and medium-sized businesses.
Why Do We Like PAYX?
- Estimated revenue growth of 17.4% for the next 12 months implies demand will accelerate from its three-year trend
- Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 39.6%
- Strong free cash flow margin of 31.6% enables it to reinvest or return capital consistently
Paychex’s stock price of $135.15 implies a valuation ratio of 7.5x forward price-to-sales. Is now the time to initiate a position? Find out in our full 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-small-cap company Comfort Systems (+782% 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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