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.
Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Running at a loss can be a red flag. Many of these businesses face mounting challenges as competition increases and funding becomes harder to secure.
LONDON (Reuters) -Hedge funds are fleeing the stocks of companies that provide discretionary items and services consumers want but do not need, in a sign they anticipate an economic downturn, a Goldman Sachs prime brokerage note showed. Hedge funds dumped long positions last week in consumer discretionary and it is the most net sold stock sector this year, said the note to clients seen by Reuters on Tuesday and published Friday. "Hedge funds dumping consumer discretionary stocks strongly suggests they’re bracing for economic trouble, likely a recession," Bruno Schneller, managing director at Erlen Capital Management, said.
(Bloomberg) -- US President Donald Trump’s policy shocks are tilting risk sentiment in favor of emerging-market equities, leading to their biggest outperformance in 16 years over US stocks as investors focus on local growth and earnings.Most Read from BloombergDOGE Visits National Gallery of Art to Discuss Museum’s Legal StatusTrump Gives New York ‘One Last Chance’ to End Congestion FeeTrump Administration Takes Over New York Penn Station RevampThe Racial Wealth Gap Is Not Just About MoneyThe MS
As big tech companies kick off quarterly earnings season this week, the industry’s bellwether companies have been thrust into a cauldron of uncertainty.View on euronews
PARIS (Reuters) -The Paris court of appeals ruled on Tuesday the French market watchdog must reconsider whether a mandatory buyout offer is or was necessary when the former media conglomerate Vivendi completed its multibillion-euro split last year. Last December Vivendi spun off its Canal+, Louis Hachette and Havas businesses, which are now listed as standalone companies in London, Paris and Amsterdam respectively. The breakup was championed by Vivendi's largest shareholder Bollore SE, the holding company of French billionaire Vincent Bollore.
Shares of the financial insights company, best known for rating the creditworthiness of corporate and government bonds, fell 2% before the opening bell. The forecast cut comes as fears of disruption from fluctuating U.S. trade policy have led companies to pause debt issuance. In the reported quarter, however, profit attributable to the company grew 8% to $625 million, or $3.46 per share, compared with $577 million, or $3.15 per share, a year ago.