Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

Our 80,000 qualified print subscribers—and 130,000 12-month engaged online audience—trust us to dive in and provide original journalism you won’t find elsewhere covering key emerging areas such as laser-driven inertial confinement fusion, lasers in space, integrated photonics, chipscale lasers, LiDAR, metasurfaces, high-energy laser weaponry, photonic crystals, and quantum computing/sensors/communications. We cover the innovations driving these markets.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Cash-Producing Stocks with Questionable Fundamentals

CABO Cover Image

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.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here are three cash-producing companies that don’t make the cut and some better opportunities instead.

Cable One (CABO)

Trailing 12-Month Free Cash Flow Margin: 20.8%

Founded in 1986, Cable One (NYSE: CABO) provides high-speed internet, cable television, and telephone services, primarily in smaller markets across the United States.

Why Does CABO Give Us Pause?

  1. Number of residential data subscribers has disappointed over the past two years, indicating weak demand for its offerings
  2. Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
  3. Underwhelming 9.2% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its shrinking returns suggest its past profit sources are losing steam

Cable One’s stock price of $133 implies a valuation ratio of 0.9x forward EV-to-EBITDA. If you’re considering CABO for your portfolio, see our FREE research report to learn more.

Kadant (KAI)

Trailing 12-Month Free Cash Flow Margin: 13.1%

Headquartered in Massachusetts, Kadant (NYSE: KAI) is a global supplier of high-value, critical components and engineered systems used in process industries worldwide.

Why Are We Wary of KAI?

  1. Muted 7.2% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
  2. Projected sales are flat for the next 12 months, implying demand will slow from its two-year trend
  3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 3.4% annually

Kadant is trading at $317.67 per share, or 31x forward P/E. Dive into our free research report to see why there are better opportunities than KAI.

Kennametal (KMT)

Trailing 12-Month Free Cash Flow Margin: 7.7%

Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE: KMT) is a provider of industrial materials and tools for various sectors.

Why Do We Pass on KMT?

  1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
  2. Estimated sales for the next 12 months are flat and imply a softer demand environment
  3. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term

At $21.93 per share, Kennametal trades at 18.2x forward P/E. Check out our free in-depth research report to learn more about why KMT doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. 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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