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 is one cash-producing company that excels at turning cash into shareholder value and two that may face some trouble.
Two stocks to sell:
PlayStudios (MYPS)
Trailing 12-Month Free Cash Flow Margin: 8%
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ: MYPS) offers free-to-play digital casino games.
Why Do We Pass on MYPS?
- Products and services have few die-hard fans as sales have declined by 4.1% annually over the last five years
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
At $3.53 per share, PlayStudios trades at 0.2x forward price-to-sales. To fully understand why you should be careful with MYPS, check out our full research report (it’s free).
Excelerate Energy (EE)
Trailing 12-Month Free Cash Flow Margin: 1.6%
Operating specialized vessels that can deliver up to 1.2 billion cubic feet of natural gas per day, Excelerate Energy (NYSE: EE) provides liquified natural gas regasification services using floating vessels that convert LNG back into natural gas.
Why Are We Hesitant About EE?
- Subscale operations are evident in its revenue base of $1.47 billion, meaning it has fewer distribution channels than its larger rivals
- Gross margin of 29.9% reflects its high production costs and unfavorable asset base
- Poor free cash flow margin of 5.5% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
Excelerate Energy is trading at $33.02 per share, or 16.7x forward P/E. Dive into our free research report to see why there are better opportunities than EE.
One stock to buy:
Kirby (KEX)
Trailing 12-Month Free Cash Flow Margin: 13.6%
Transporting goods along all U.S. coasts, Kirby (NYSE: KEX) provides inland and coastal marine transportation services.
Why Should You Buy KEX?
- Annual revenue growth of 11.3% over the last five years was superb and indicates its market share increased during this cycle
- Share buybacks catapulted its annual earnings per share growth to 47.2%, which outperformed its revenue gains over the last five years
- Free cash flow margin expanded by 10.4 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Kirby’s stock price of $137.27 implies a valuation ratio of 17.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-quality stocks for all market conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
