While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
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 excels at turning cash into shareholder value and two that may face some trouble.
Two Stocks to Sell:
Upland (UPLD)
Trailing 12-Month Free Cash Flow Margin: 9.8%
Founder Jack McDonald’s second software rollup, Upland Software (NASDAQ: UPLD) is a one stop shop for sales and marketing software, project management, HR, and contact center services for small and medium sized businesses.
Why Do We Pass on UPLD?
- Software offerings aren’t resonating in this new AI paradigm as its revenue declined by 4.4% annually over the last three years
- Sales are projected to tank by 22.7% over the next 12 months as its demand continues evaporating
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
Upland is trading at $2.04 per share, or 0.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than UPLD.
HP (HPQ)
Trailing 12-Month Free Cash Flow Margin: 4.9%
Born from the legendary Silicon Valley garage startup founded by Bill Hewlett and Dave Packard in 1939, HP (NYSE: HPQ) designs and sells personal computers, printers, and related technology products and services to consumers, businesses, and enterprises worldwide.
Why Should You Dump HPQ?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1% annually over the last five years
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 3.4% annually, worse than its revenue
- Free cash flow margin dropped by 4.1 percentage points over the last five years, implying the company became more capital intensive as competition picked up
HP’s stock price of $26 implies a valuation ratio of 7.2x forward P/E. Read our free research report to see why you should think twice about including HPQ in your portfolio.
One Stock to Watch:
RB Global (RBA)
Trailing 12-Month Free Cash Flow Margin: 15.9%
Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE: RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries.
Why Are We Fans of RBA?
- Annual revenue growth of 52.9% over the last two years was superb and indicates its market share increased during this cycle
- Adjusted operating margin expanded by 3.4 percentage points over the last five years as it scaled and became more efficient
- Earnings per share have massively outperformed its peers over the last five years, increasing by 23.7% annually
At $105.61 per share, RB Global trades at 28.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. 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
