A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may struggle to keep up.
One Stock to Sell:
Agilysys (AGYS)
Trailing 12-Month Free Cash Flow Margin: 19.1%
With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ:AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.
Why Does AGYS Fall Short?
- Annual revenue growth of 17.2% over the last five years was below our standards for the software sector
- Gross margin of 61.7% reflects its relatively high servicing costs
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
At $90.92 per share, Agilysys trades at 6.5x forward price-to-sales. To fully understand why you should be careful with AGYS, check out our full research report (it’s free).
Two Stocks to Watch:
Marvell Technology (MRVL)
Trailing 12-Month Free Cash Flow Margin: 20.3%
Moving away from a low margin storage device management chips in one of the biggest semiconductor business model pivots of the past decade, Marvell Technology (NASDAQ: MRVL) is a fabless designer of special purpose data processing and networking chips used by data centers, communications carriers, enterprises, and autos.
Why Does MRVL Stand Out?
- Annual revenue growth of 22% over the last five years was superb and indicates its market share increased during this cycle
- Operating margin improvement of 24.6 percentage points over the last five years demonstrates its ability to scale efficiently
- Free cash flow margin expanded by 8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Marvell Technology’s stock price of $78.66 implies a valuation ratio of 24x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
First Solar (FSLR)
Trailing 12-Month Free Cash Flow Margin: 12.2%
Headquartered in Arizona, First Solar (NASDAQ:FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.
Why Is FSLR a Good Business?
- Market share has increased this cycle as its 26.4% annual revenue growth over the last two years was exceptional
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 71.8% annually, topping its revenue gains
- Free cash flow turned positive over the last five years, showing the company is at an important crossroads
First Solar is trading at $227 per share, or 10.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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 Strong Momentum Stocks for this week. 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.