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 is one cash-producing company that excels at turning cash into shareholder value and two that may struggle to keep up.

Two Stocks to Sell:

Bumble (BMBL)

Trailing 12-Month Free Cash Flow Margin: 18.6%

Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ: BMBL) is a leading dating app built with women at the center.

Why Does BMBL Give Us Pause?

1. Lackluster 7.2% annual revenue growth over the last three years indicates the company is losing ground to competitors
2. Decision to emphasize platform growth over monetization has contributed to 4.6% annual declines in its average revenue per buyer
3. Estimated sales decline of 9.5% for the next 12 months implies a challenging demand environment

Bumble’s stock price of $6.58 implies a valuation ratio of 2.4x forward EV/EBITDA. To fully understand why you should be careful with BMBL, check out our full research report (it’s free).

American Airlines (AAL)

Trailing 12-Month Free Cash Flow Margin: 2.9%

One of the ‘Big Four’ airlines in the US, American Airlines (NASDAQ: AAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Why Should You Sell AAL?

1. Demand for its offerings was relatively low as its number of revenue passenger miles has underwhelmed
2. Below-average returns on capital indicate management struggled to find compelling investment opportunities
3. High net-debt-to-EBITDA ratio of 6× could force the company to raise capital at unfavorable terms if market conditions deteriorate

At $12.92 per share, American Airlines trades at 8.7x forward P/E. If you’re considering AAL for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Globus Medical (GMED)

Trailing 12-Month Free Cash Flow Margin: 20.1%

With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE: GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.

Why Does GMED Stand Out?

1. Average constant currency growth of 62.3% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
2. Estimated revenue growth of 14% for the next 12 months implies its momentum over the last two years will continue
3. Earnings growth has trumped its peers over the last five years as its EPS has compounded at 20.2% annually

Globus Medical is trading at $62 per share, or 18.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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