1 Cash-Producing Stock on Our Buy List and 2 Facing Challenges

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 is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.

Two Stocks to Sell:

Marqeta (MQ)

Trailing 12-Month Free Cash Flow Margin: 9.9%

Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ:MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.

Why Do We Think Twice About MQ?

1. Annual sales declines of 19% for the past two years show its products and services struggled to connect with the market
2. Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin
3. Low free cash flow margin of 9.9% for the last year gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

Marqeta’s stock price of $4.52 implies a valuation ratio of 3.1x forward price-to-sales. Read our free research report to see why you should think twice about including MQ in your portfolio.

Valmont (VMI)

Trailing 12-Month Free Cash Flow Margin: 10%

Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE:VMI) provides engineered products and infrastructure services for the agricultural industry.

Why Does VMI Fall Short?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Projected sales growth of 2.7% for the next 12 months suggests sluggish demand
3. Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 28.3%

Valmont is trading at $412.95 per share, or 19.8x forward P/E. Check out our free in-depth research report to learn more about why VMI doesn’t pass our bar.

One Stock to Buy:

Pinterest (PINS)

Trailing 12-Month Free Cash Flow Margin: 26.8%

Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.

Why Will PINS Outperform?

1. Monthly Active Users have grown by 10.8% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
2. Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 27.8%, and its rise over the last few years was fueled by some leverage on its fixed costs
3. PINS is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety

At $32.91 per share, Pinterest trades at 16.5x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .

Stocks We Like Even More

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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 Comfort Systems (+782% 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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