With AI related earnings still supporting a broad bull market and central banks keeping policy relatively accommodative, many investors are focusing on companies that actually turn those conditions into hard cash. High free cash flow and lower debt can give a stock more room to handle lofty valuations and potential rate shocks, especially if growth expectations cool. This article looks at three stocks from a High Free Cash Flow Stocks screener that appear closely tied to the current AI and policy backdrop, and explains how those links may help or hurt your portfolio decisions around them.

Houlihan Lokey (HLI)

Overview: Houlihan Lokey is a global investment bank that advises companies, sponsors, and governments on mergers and acquisitions, capital raising, financial restructurings, and independent valuations.

Operations: Houlihan Lokey generates most of its roughly US$2.6b in revenue from Corporate Finance (about US$1.7b), with additional contributions from Financial Restructuring (about US$0.5b) and Financial and Valuation Advisory (about US$0.3b). The firm has a meaningful international footprint alongside its US business.

Market Cap: US$9.2b

Houlihan Lokey stands out in this high free cash flow theme because its advisory model is asset light, cash generative, and not heavily tied to capital intensive balance sheets. This can appeal when rates are uncertain and AI led markets are priced for perfection. Analyst expectations include earnings growth forecasts around 12% a year and a 2.09% dividend. In addition, the stock price currently screens as below some estimates of fair value, which together create an interesting mix of income and potential upside. At the same time, investors need to weigh a high cost base, reliance on US centric M&A trends, and possible shifts in restructuring volumes if rates fall. Those trade offs may matter even more as Houlihan Lokey invests in acquisitions and senior hires to expand sectors such as energy, real estate, and capital solutions.

Houlihan Lokey’s asset light, cash rich model can make its current valuation debate more interesting than it first appears. See how the DCF valuation analysis for Houlihan Lokey lines up with its M&A cycle and rate risks.

CF Bankshares (CFBK)

Overview: CF Bankshares is a Columbus based bank holding company for CFBank that offers a full range of consumer and business banking services, including deposits, mortgages, commercial real estate and equipment lending, construction finance, and digital banking solutions.

Operations: CF Bankshares generates about US$53.4m in revenue from financial services in the United States.

Market Cap: US$204.1m

CF Bankshares gives you a smaller US regional bank that combines high free cash flow with improving profitability, with net profit margins around 32.9% and earnings growth of about 22.8% over the past year. The stock trades below some estimates of fair value and at a P/E slightly under the US banks average. Analysts expect solid earnings and revenue growth, which has already fed into stronger recent share price performance. On the risk side, return on equity is modest at 9.6% and the allowance for bad loans leaves less room for error if credit conditions worsen, especially if the current bull market reverses. The key consideration is how these trade offs look once you factor in stable cash generation and the latest leadership hires in mortgage lending.

CF Bankshares’ high free cash flow, 32.9% net margins and sub sector P/E hint at a story the market may not fully be pricing in yet, but the real twist shows up in the analyst forecasts for CF Bankshares

Interpublic Group of Companies (IPG)

Overview: Interpublic Group of Companies is a global advertising and marketing services company that helps brands plan, create, and deliver campaigns across media, data, and customer experience channels through agencies such as McCann, FCB, IPG Health, Mediabrands, and Weber Shandwick.

Operations: Interpublic Group of Companies generates about US$3.9b from Media, Data & Engagement Solutions, US$3.4b from Integrated Advertising & Creativity Led, and US$1.4b from Specialized Communications & Experiential Solutions.

Market Cap: US$9.1b

Interpublic Group of Companies offers a mix of high free cash generation, a 5.37% dividend, and a business that is leaning into AI driven, data centric marketing at a time when those services sit at the heart of client budgets. The stock trades at a discount to some estimates of fair value and below peer P/E levels, yet faces questions after earnings fell 32.5% last year, organic revenue declined, and a US$583.0m one off loss affected recent results. For investors who want resilient cash flow and income exposure to AI related advertising spend, but are wary of client churn, slower revenue growth, and a higher risk funding structure, the key consideration is how those trade offs balance out over the next few years.

Interpublic Group of Companies appears to benefit from AI-driven ad spend and solid free cash flow, which may be obscuring a more complex valuation narrative. The core tension is reflected in the DCF valuation analysis for Interpublic Group of Companies

The three stocks highlighted here are only the starting point, as the full High Free Cash Flow Stocks screener on Simply Wall St surfaced 3 more companies with equally compelling narratives that may fit the same high cash generation and moderate risk profile. To identify and analyze the highest conviction ideas for your portfolio, unlock the full set of filters and narrative tools inside the High Free Cash Flow Stocks screener.

Take Control of Your Investment Journey

If Houlihan Lokey or any of these companies sound like a great opportunity, register for FREE with Simply Wall St and add your companies to a Watchlist to monitor the share price against the fair value the ideal entry point. Once you've made your move, manage your holdings with our Portfolio Command Center that filters out the noise to deliver only the most critical, actionable updates. Throughout your journey, our Community allows you to filter the best ideas from thousands of investor perspectives. By uncovering hidden catalysts and risks early, you'll accelerate your decision-making and stay one step ahead of the market.

Seeking Alternatives Before The Window Closes?

Fresh opportunities can move quickly, and the best breakout setups rarely stay under the radar for long. Scan these ideas before momentum is fully caught by the crowd and consider your next steps.

• Target reliable cash generators that can keep funding growth even when sentiment cools by scanning the curated list of solid balance sheet and fundamentals (48 results) while it still flies under the radar for now.
• Explore potential income opportunities with companies aiming to keep payouts flowing by reviewing the hand picked 10 dividend fortresses before yields change or valuations move away from your preferred entry range.
• Consider positioning for possible infrastructure-related themes by screening the focused 35 power grid technology and infrastructure stocks and identifying grid technology stocks before they attract broader attention.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.