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.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. 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:
Payoneer (PAYO)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Founded during the early days of global e-commerce in 2005 to solve international payment challenges, Payoneer (NASDAQ: PAYO) provides financial technology services that enable small and medium-sized businesses to send and receive payments globally across borders.
Why Does PAYO Worry Us?
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 5.2% annually while its revenue grew
- Underwhelming 7.9% return on equity reflects management’s difficulties in finding profitable growth opportunities
Payoneer’s stock price of $7.12 implies a valuation ratio of 18.9x forward P/E. Dive into our free research report to see why there are better opportunities than PAYO.
Two Stocks to Buy:
Palantir Technologies (PLTR)
Trailing 12-Month Free Cash Flow Margin: 56.5%
Named after the all-seeing stones in "Lord of the Rings," Palantir Technologies (NASDAQ: PLTR) develops software platforms that help government agencies and enterprises integrate, analyze, and operationalize their data for decision-making.
Why Is PLTR a Good Business?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 76.7% over the last year
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
- Strong free cash flow margin of 56.5% enables it to reinvest or return capital consistently
At $186.56 per share, Palantir Technologies trades at 47x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
Alignment Healthcare (ALHC)
Trailing 12-Month Free Cash Flow Margin: 3.9%
Founded in 2013 with a mission to transform healthcare for seniors, Alignment Healthcare (NASDAQ: ALHC) provides Medicare Advantage health plans for seniors with features like concierge services, transportation benefits, and technology-driven care coordination.
Why Should You Buy ALHC?
- Market share has increased this cycle as its 43.2% annual revenue growth over the last two years was exceptional
- Additional sales over the last five years increased its profitability as the 47.9% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin grew by 6.8 percentage points over the last five years, giving the company more chips to play with
Alignment Healthcare is trading at $13.62 per share, or 22x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
