2 Cash-Producing Stocks to Target This Week and 1 We Find Risky

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 that may face some trouble.

One Stock to Sell:

GoDaddy (GDDY)

Trailing 12-Month Free Cash Flow Margin: 33.4%

Known for its memorable Super Bowl commercials that put it on the map, GoDaddy (NYSE:GDDY) is a domain registrar and web services provider that helps entrepreneurs establish an online presence through domain registration, website building, hosting, and e-commerce tools.

Why Do We Steer Clear of GDDY?

1. Average billings growth of 3.6% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
2. Estimated sales growth of 5.9% for the next 12 months implies demand will slow from its two-year trend
3. Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient

At $88.99 per share, GoDaddy trades at 2.3x forward price-to-sales. Dive into our free research report to see why there are better opportunities than GDDY.

Two Stocks to Watch:

Western Digital (WDC)

Trailing 12-Month Free Cash Flow Margin: 24.7%

Founded in 1970 by a Motorola employee, Western Digital (NASDAQ: WDC) is a leading producer of hard disk drives, SSDs and flash memory.

Why Do We Like WDC?

1. Sales outlook for the upcoming 12 months calls for 40.2% growth, an acceleration from its two-year trend
2. Operating margin improved by 17.3 percentage points over the last five years as it eliminated redundant costs
3. Free cash flow margin increased by 17.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Western Digital’s stock price of $529.46 implies a valuation ratio of 31.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Distribution Solutions (DSGR)

Trailing 12-Month Free Cash Flow Margin: 1.4%

Founded in 1952, Distribution Solutions (NASDAQ:DSGR) provides supply chain solutions and distributes industrial, safety, and maintenance products to various industries.

Why Are We Positive On DSGR?

1. Annual revenue growth of 38.1% over the last four years was superb and indicates its market share increased during this cycle
2. Incremental sales over the last two years boosted profitability as its annual earnings per share growth of 14% outstripped its revenue performance
3. Free cash flow margin expanded by 5.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends

Distribution Solutions is trading at $27.01 per share, or 18.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth 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 meeting 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.