A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Luckily for you, we built StockStory to help you separate the good from the bad. That said, 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:
8x8 (EGHT)
Trailing 12-Month Free Cash Flow Margin: 6.5%
Named after its founding year (1987) with "8x8" representing binary code for communications, 8x8 (NASDAQ: EGHT) provides cloud-based contact center and unified communications solutions that enable businesses to manage customer interactions and internal communications through a single platform.
Why Should You Sell EGHT?
- Offerings struggled to generate meaningful interest as its average billings growth of 4.6% over the last year did not impress
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Static operating margin over the last year shows it couldn’t become more efficient
8x8 is trading at $1.86 per share, or 0.4x forward price-to-sales. To fully understand why you should be careful with EGHT, check out our full research report (it’s free).
eBay (EBAY)
Trailing 12-Month Free Cash Flow Margin: 14.5%
Originally known as the first online auction site, eBay (NASDAQ: EBAY) is one of the world’s largest online marketplaces.
Why Does EBAY Give Us Pause?
- White space opportunities may be dwindling as its growth in active buyers averaged a weak 1.3%
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.8%
- Day-to-day expenses have swelled relative to revenue over the last few years as its EBITDA margin fell by 7.4 percentage points
At $115.11 per share, eBay trades at 14.8x forward EV/EBITDA. Dive into our free research report to see why there are better opportunities than EBAY.
One Stock to Buy:
Marsh (MRSH)
Trailing 12-Month Free Cash Flow Margin: 17.9%
With roots dating back to 1871 and a presence in over 130 countries, Marsh (NYSE: MRSH) is a global professional services firm that helps organizations manage risk, strategy, and workforce challenges through its four specialized businesses.
Why Will MRSH Outperform?
- Annual revenue growth of 9.3% over the last five years was superb and indicates its market share increased during this cycle
- Dominant market position is represented by its $27.52 billion in revenue and gives it fixed cost leverage when sales grow
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
Marsh’s stock price of $178.54 implies a valuation ratio of 16.8x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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.
