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.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here are three cash-producing companies to steer clear of and a few better alternatives.
Amkor (AMKR)
Trailing 12-Month Free Cash Flow Margin: 2.8%
Operating through a largely Asian facility footprint, Amkor Technologies (NASDAQ: AMKR) provides outsourced packaging and testing for semiconductors.
Why Are We Hesitant About AMKR?
- High input costs result in an inferior gross margin of 14.4% that must be offset through higher volumes
- Performance over the past five years shows its incremental sales were less profitable, as its 1.5% annual earnings per share growth trailed its revenue gains
- Lacking free cash flow margin got worse over the last five years as its investment needs accelerated
Amkor’s stock price of $56.20 implies a valuation ratio of 31.2x forward P/E. Dive into our free research report to see why there are better opportunities than AMKR.
Lindblad Expeditions (LIND)
Trailing 12-Month Free Cash Flow Margin: 7.1%
Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ: LIND) offers cruising experiences to remote destinations in partnership with National Geographic.
Why Do We Pass on LIND?
- Sales trends were unexciting over the last two years as its 14.5% annual growth was below the typical consumer discretionary company
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Free cash flow margin is expected to remain in place over the coming year
At $20.08 per share, Lindblad Expeditions trades at 283.8x forward P/E. Check out our free in-depth research report to learn more about why LIND doesn’t pass our bar.
Greenbrier (GBX)
Trailing 12-Month Free Cash Flow Margin: 7.1%
Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE: GBX) supplies the freight rail transportation industry with railcars and related services.
Why Does GBX Worry Us?
- Declining unit sales over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- Gross margin of 14% is below its competitors, leaving less money to invest in areas like marketing and R&D
- Cash burn makes us question whether it can achieve sustainable long-term growth
Greenbrier is trading at $54.99 per share, or 14.1x forward P/E. If you’re considering GBX for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
