Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
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 best left off your watchlist.
Two Stocks to Sell:
Hudson Technologies (HDSN)
Trailing 12-Month Free Cash Flow Margin: 18.8%
Founded in 1991, Hudson Technologies (NASDAQ:HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.
Why Is HDSN Not Exciting?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 9.9% annually over the last two years
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
Hudson Technologies’s stock price of $7.24 implies a valuation ratio of 8.4x forward EV-to-EBITDA. If you’re considering HDSN for your portfolio, see our FREE research report to learn more.
Western Union (WU)
Trailing 12-Month Free Cash Flow Margin: 9.9%
With a history dating back to 1851 when it began as a telegraph company, Western Union (NYSE:WU) is a global money transfer service that enables consumers and businesses to send funds across borders and currencies, typically within minutes.
Why Should You Sell WU?
- Sales tumbled by 2.9% annually over the last five years, showing market trends are working against its favor during this cycle
- Earnings per share have contracted by 1.1% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
At $10.12 per share, Western Union trades at 5.7x forward P/E. Read our free research report to see why you should think twice about including WU in your portfolio.
One Stock to Watch:
Palo Alto Networks (PANW)
Trailing 12-Month Free Cash Flow Margin: 38.6%
Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ:PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats.
Why Could PANW Be a Winner?
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Healthy operating margin of 13.2% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last year
- Strong free cash flow margin of 38.6% enables it to reinvest or return capital consistently
Palo Alto Networks is trading at $167.17 per share, or 10.9x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.