3 Cash-Producing Stocks Playing with Fire
Cash flow is valuable, but it's not everything - StockStory helps you identify the companies that truly put it to work. That said, here are three cash-producing companies that don't make the cut and some better opportunities instead.
Trailing 12-Month Free Cash Flow Margin: 14.5%
Credited with the creation of toys such as Mr. Potato Head and the Rubik's Cube, Hasbro (NASDAQ:HAS) is a global entertainment company offering a diverse range of toys, games, and multimedia experiences for children and families.
Why Do We Steer Clear of HAS?
Sales tumbled by 3.5% annually over the last five years, showing consumer trends are working against its favor
Persistent operating margin losses suggest the business manages its expenses poorly
Diminishing returns on capital from an already low starting point show that neither management's prior nor current bets are going as planned
At $71.81 per share, Hasbro trades at 16.9x forward P/E. If you're considering HAS for your portfolio, see our FREE research report to learn more.
Trailing 12-Month Free Cash Flow Margin: 7.8%
Founded in 1960, Sealed Air Corporation (NYSE: SEE) specializes in the development and production of protective and food packaging solutions, serving a variety of industries.
Why Do We Pass on SEE?
Declining unit sales over the past two years imply it may need to invest in improvements to get back on track
Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
Eroding returns on capital suggest its historical profit centers are aging
Sealed Air is trading at $30.79 per share, or 10.1x forward P/E. Check out our free in-depth research report to learn more about why SEE doesn't pass our bar.
Trailing 12-Month Free Cash Flow Margin: 4.6%
One of the 'Big Four' airlines in the US, Delta Air Lines (NYSE:DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.
Why Do We Avoid DAL?
Number of revenue passenger miles has disappointed over the past two years, indicating weak demand for its offerings
Estimated sales decline of 1.1% for the next 12 months implies a challenging demand environment
Negative returns on capital show that some of its growth strategies have backfired
Delta's stock price of $49.40 implies a valuation ratio of 7.8x forward P/E. To fully understand why you should be careful with DAL, check out our full research report (it's free).
The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking 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-micro-cap company Tecnoglass (+1,754% 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
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
11 minutes ago
- Yahoo
Global trade in photos as a new deadline approaches on Trump tariffs
While discussions with trading partners continue and a revamp of U.S. trade policy faces legal hurdles in federal court, U.S. President Donald Trump is approaching his deadline of Friday, Aug. 1, for implementing higher import tariffs on products from across the world. ___ This is a photo gallery curated by AP photo editors. Sign in to access your portfolio
Yahoo
11 minutes ago
- Yahoo
FAT Brands Inc (FAT) Q2 2025 Earnings Call Highlights: Navigating Challenges and Capitalizing ...
Release Date: July 30, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points FAT Brands Inc (NASDAQ:FAT) has been recognized on Time and Statista's best mid-sized company list for the second consecutive year. The company has a diversified global restaurant portfolio with approximately 2,300 locations across 49 states and 35 countries. FAT Brands Inc (NASDAQ:FAT) has a robust development pipeline with approximately 1,000 locations committed to open over the next 5 to 7 years. The company is seeing strong performance in its snack segment, with Great American Cookies and Marble Slab Creamery showing consistent strength. FAT Brands Inc (NASDAQ:FAT) has implemented over $5 million in annual SGNA reductions and identified further cost optimization opportunities. Negative Points Total revenues decreased by 3.4% to $146.8 million compared to the previous year's quarter. The company reported a net loss attributable to FAT Brands of $54.2 million, an increase from the previous year's net loss. General and administrative expenses increased significantly due to non-cash share-based compensation expenses. Market volatility has delayed the planned $75 to $100 million equity raise for Twin Peaks. The company is facing challenges in the QSR space, with brands like Fasoli's experiencing a tougher sales environment. Q & A Highlights Warning! GuruFocus has detected 8 Warning Signs with FAT. Q: Can you provide an update on the SEC civil action following the DOJ case dismissal, and will you recover any past legal costs from insurance? A: We are hopeful that the SEC civil case will be dismissed following the DOJ case, but we cannot comment further at this time. Regarding legal fees, which totaled $70 million over the last 3.5 years, we have filed with our insurance company and will recover the policy limits as part of the derivative case settlement. - Andy Weiderhorn, Chairman of the Board. Q: The increase in G&A costs was attributed to share-based compensation. Is this a one-time event, and should we expect G&A costs to decrease? A: Yes, the increase in G&A costs is a one-time event tied to the Twin Peaks spinoff, and costs will decrease moving forward. - Andy Weiderhorn, Chairman of the Board. Q: Can you provide a timeline for the rollout of the new manufacturing contract and its expected benefits? A: The contract is currently in production and will be fully rolled out in the next 30 to 60 days. We expect to announce further details in about 3 to 4 weeks. The contract involves different operators and will significantly benefit our cookie dough production. - Andy Weiderhorn, Chairman of the Board. Q: Are you seeing improved restaurant industry traffic similar to other companies like Cisco and Wingstop? A: The performance varies by brand category. Snack brands like cookies and ice cream are doing well, while QSR brands face challenges. However, the polished casual dining segment is improving, and we are optimistic about future consumer confidence. - Andy Weiderhorn, Chairman of the Board. Q: What is the current liquidity situation, and how are you managing financial flexibility? A: We have $130 to $150 million in retained notes for liquidity, which we can finance or sell as needed. We also have an ATM in place but have not used it much due to undervaluation concerns. We are focusing on G&A savings and accelerating the Smokey Bones portfolio conversion to improve liquidity. - Andy Weiderhorn, Chairman of the Board. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
11 minutes ago
- Yahoo
Stifel Cuts Tesla, Inc. (TSLA) Price Target
Tesla, Inc. (NASDAQ:TSLA) is among the 12 Best EV Charging Stocks to Buy According to Hedge Funds. Stifel cut its price objective for Tesla, Inc. (NASDAQ:TSLA) to $440 from $450 on July 25, while retaining a Buy rating. 25 Most In Demand Cars Heading into 2024 The announcement comes after the firm's Q2 2025 earnings report, in which the company reported $22.5 billion in sales, a 12% year-over-year decline but a 16% sequential increase. The number was about 1% below Stifel's forecast. The company explained its price target change by citing the expected impact of tariffs on Tesla, Inc. (NASDAQ:TSLA)'s Energy and Automotive businesses. Stifel notes that the 'overwhelming key to the company's story over the next year' resides in the development and recognition of its unsupervised Full Self-Driving technology and progress on its Robotaxi plan despite near-term obstacles. These technologies are considered significant drivers of Tesla, Inc. (NASDAQ:TSLA)'s long-term worth. The firm has modified its financial model accordingly to reflect these developing risks and opportunities while reiterating confidence in its strategic trajectory. While we acknowledge the potential of TSLA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 High-Growth EV Stocks to Invest In and 13 Best Car Stocks to Buy in 2025. Disclosure. None.
