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.
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:
Silgan Holdings (SLGN)
Trailing 12-Month Free Cash Flow Margin: 6.4%
Established in 1987, Silgan Holdings (NYSE: SLGN) is a supplier of rigid packaging for consumer goods products, specializing in metal containers, closures, and plastic packaging.
Why Do We Avoid SLGN?
- Sales trends were unexciting over the last two years as its 4.1% annual growth was below the typical industrials company
- Projected sales growth of 2.6% for the next 12 months suggests sluggish demand
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 16.8%
Silgan Holdings is trading at $47.98 per share, or 12.7x forward P/E. To fully understand why you should be careful with SLGN, check out our full research report (it’s free).
Two Stocks to Watch:
Atlassian (TEAM)
Trailing 12-Month Free Cash Flow Margin: 22.3%
Started by two Australian university friends who funded their startup with credit cards, Atlassian (NASDAQ: TEAM) provides software tools that help teams plan, track, collaborate, and share knowledge across organizations.
Why Could TEAM Be a Winner?
- Market share has increased as its 21.6% annual revenue growth over the last two years was exceptional
- Prominent and differentiated software leads to a stellar gross margin of 84.1%
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
Atlassian’s stock price of $80.45 implies a valuation ratio of 3.2x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Shift4 (FOUR)
Trailing 12-Month Free Cash Flow Margin: 8.5%
Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE: FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.
Why Are We Backing FOUR?
- Market share has increased this cycle as its 27.2% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 40.2% annual growth in its earnings per share outpaced its revenue
- Adequate return on equity shows management makes decent investment decisions
At $58.51 per share, Shift4 trades at 9.9x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive 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 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
