While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, 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:

10x Genomics (TXG)

Trailing 12-Month Free Cash Flow Margin: 8.8%

Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ: TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.

Why Are We Cautious About TXG?

1. Muted 6.5% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Negative returns on capital show management lost money while trying to expand the business

10x Genomics’s stock price of $13.45 implies a valuation ratio of 2.8x forward price-to-sales. Read our free research report to see why you should think twice about including TXG in your portfolio.

Amneal (AMRX)

Trailing 12-Month Free Cash Flow Margin: 9.9%

Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ: AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.

Why Are We Wary of AMRX?

1. Underwhelming 3.7% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $9.16 per share, Amneal trades at 13.3x forward P/E. If you’re considering AMRX for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Interactive Brokers (IBKR)

Trailing 12-Month Free Cash Flow Margin: 267%

Founded in 1977 and known for its sophisticated trading technology and global reach across 150+ exchanges in 34 countries, Interactive Brokers (NASDAQ: IBKR) is a global electronic broker that provides low-cost trading and investment services across stocks, options, futures, forex, bonds, and other financial instruments.

Why Are We Backing IBKR?

1. Annual revenue growth of 22.7% over the past five years was outstanding, reflecting market share gains this cycle
2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 27.4% annually, topping its revenue gains
3. Annual tangible book value per share growth of 20.2% over the past two years was outstanding, reflecting strong capital accumulation this cycle

Interactive Brokers is trading at $62.38 per share, or 31.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

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 5 Growth Stocks for this month. 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 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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