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. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two that may face some trouble.
Two Stocks to Sell:
Kulicke and Soffa (KLIC)
Trailing 12-Month Free Cash Flow Margin: 14.7%
Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices
Why Do We Think Twice About KLIC?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Efficiency has decreased over the last five years as its operating margin fell by 27.7 percentage points
- Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 26.9% annually
Kulicke and Soffa’s stock price of $45.60 implies a valuation ratio of 30x forward P/E. Read our free research report to see why you should think twice about including KLIC in your portfolio.
Albany (AIN)
Trailing 12-Month Free Cash Flow Margin: 8%
Founded in 1895, Albany (NYSE: AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.
Why Do We Pass on AIN?
- 2.5% annual revenue growth over the last two years was slower than its industrials peers
- 9.9 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
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $47.68 per share, Albany trades at 16.8x forward P/E. If you’re considering AIN for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Samsara (IOT)
Trailing 12-Month Free Cash Flow Margin: 11.9%
From sensors on vehicles to AI-powered cameras that help prevent accidents, Samsara (NYSE: IOT) is a cloud-based Internet of Things platform that helps businesses improve the safety, efficiency, and sustainability of their physical operations.
Why Are We Backing IOT?
- Customers view its software as mission-critical to their operations as its ARR has averaged 31.8% growth over the last year
- Forecasted revenue growth of 21.2% for the next 12 months indicates its momentum over the last two years is sustainable
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Samsara is trading at $37.75 per share, or 12.6x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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-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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