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. That said, 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:

Amkor (AMKR)

Trailing 12-Month Free Cash Flow Margin: 4.4%

Operating through a largely Asian facility footprint, Amkor Technologies (NASDAQ: AMKR) provides outsourced packaging and testing for semiconductors.

Why Are We Out on AMKR?

1. Sales tumbled by 4.4% annually over the last two years, showing market trends are working against its favor during this cycle
2. Gross margin of 14.4% reflects its high production costs
3. Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability

Amkor’s stock price of $23.35 implies a valuation ratio of 17.6x forward P/E. Check out our free in-depth research report to learn more about why AMKR doesn’t pass our bar.

Azenta (AZTA)

Trailing 12-Month Free Cash Flow Margin: 4.2%

Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.

Why Do We Pass on AZTA?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 7.2% annually over the last five years
2. Sales were less profitable over the last five years as its earnings per share fell by 18.7% annually, worse than its revenue declines
3. 22.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

At $28.22 per share, Azenta trades at 37x forward P/E. Dive into our free research report to see why there are better opportunities than AZTA.

One Stock to Watch:

Dick's (DKS)

Trailing 12-Month Free Cash Flow Margin: 2.6%

Started as a hunting supply store, Dick’s Sporting Goods (NYSE: DKS) is a retailer that sells merchandise for traditional sports as well as for fitness and outdoor activities.

Why Are We Fans of DKS?

1. Comparable store sales rose by 4% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
2. Earnings per share have comfortably outperformed the peer group average over the last six years, increasing by 27.4% annually
3. Industry-leading 24.5% return on capital demonstrates management’s skill in finding high-return investments

Dick's is trading at $218.00 per share, or 14.5x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our 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 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

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