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 reinvests wisely to drive long-term success and two that may face some trouble.
Two Stocks to Sell:
Upland Software (UPLD)
Trailing 12-Month Free Cash Flow Margin: 9.4%
Operating under the mantra "land and expand," Upland Software (NASDAQ: UPLD) provides cloud-based applications that help organizations manage projects, workflows, and digital transformation across various business functions.
Why Does UPLD Worry Us?
- Flat sales over the last five years suggest it must innovate and find new ways to grow
- Sales are projected to tank by 19.2% over the next 12 months as its demand continues evaporating
- Suboptimal cost structure is highlighted by its history of operating margin losses
At $2.29 per share, Upland Software trades at 0.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than UPLD.
Otis (OTIS)
Trailing 12-Month Free Cash Flow Margin: 9.5%
Credited with inventing the first hydraulic passenger elevator, Otis Worldwide (NYSE: OTIS) is an elevator and escalator manufacturing, installation and service company.
Why Does OTIS Give Us Pause?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 4.2% for the next year implies demand will be shaky
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 2 percentage points
Otis is trading at $92 per share, or 22.1x forward P/E. If you’re considering OTIS for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
AvidXchange (AVDX)
Trailing 12-Month Free Cash Flow Margin: 14.1%
Born from the frustration of paper-based accounting processes in the early 2000s, AvidXchange (NASDAQ: AVDX) provides accounts payable automation software and payment solutions that help middle-market businesses digitize and streamline their invoice processing and payments.
Why Are We Positive On AVDX?
- Market share has increased this cycle as its 22% annual revenue growth over the last five years was exceptional
- Additional sales over the last two years increased its profitability as the 69.6% annual growth in its earnings per share outpaced its revenue
AvidXchange’s stock price of $9.99 implies a valuation ratio of 4.3x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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