A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

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 two cash-producing companies that leverage their financial strength to beat the competition and one best left off your watchlist.

One Stock to Sell:

BigCommerce (BIGC)

Trailing 12-Month Free Cash Flow Margin: 7.1%

Founded in Sydney, Australia in 2009 by Mitchell Harper and Eddie Machaalani, BigCommerce (NASDAQ: BIGC) provides software for businesses to easily create online stores.

Why Should You Sell BIGC?

1. ARR growth averaged a weak 4% over the last year, suggesting that competition is pulling some attention away from its software
2. Estimated sales growth of 3.7% for the next 12 months implies demand will slow from its three-year trend
3. Persistent operating margin losses suggest the business manages its expenses poorly

BigCommerce’s stock price of $5.24 implies a valuation ratio of 1.2x forward price-to-sales. Read our free research report to see why you should think twice about including BIGC in your portfolio.

Two Stocks to Watch:

Remitly (RELY)

Trailing 12-Month Free Cash Flow Margin: 26.9%

With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ: RELY) is an online platform that enables consumers to safely and quickly send money globally.

Why Do We Love RELY?

1. Has the opportunity to boost monetization through new features and premium offerings as its active customers have grown by 37.3% annually over the last two years
2. Incremental sales over the last three years have been highly profitable as its earnings per share increased by 74% annually, topping its revenue gains
3. Free cash flow margin grew by 35.6 percentage points over the last few years, giving the company more chips to play with

Remitly is trading at $17.13 per share, or 17.1x forward EV/EBITDA. Is now a good time to buy? See for yourself in our full research report, it’s free.

Urban Outfitters (URBN)

Trailing 12-Month Free Cash Flow Margin: 5.1%

Founded as a purveyor of vintage items, Urban Outfitters (NASDAQ: URBN) now largely sells new apparel and accessories to teens and young adults seeking on-trend fashion.

Why Is URBN on Our Radar?

1. Comparable store sales rose by 4.2% on average over the past two years, demonstrating its ability to drive increased spending at existing locations
2. Sales outlook for the upcoming 12 months calls for 8.1% growth, an acceleration from its six-year trend
3. Earnings per share grew by 46.7% annually over the last five years, massively outpacing its peers

At $74.92 per share, Urban Outfitters trades at 16.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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