Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Just because a business has cash doesn’t mean it’s a good investment. Luckily, StockStory is here to help you separate the winners from the losers. Keeping that in mind, here are two companies with net cash positions that can continue growing sustainably and one with hidden risks.
One Stock to Sell:
PACCAR (PCAR)
Net Cash Position: $8.1 billion (16.4% of Market Cap)
Founded more than a century ago, PACCAR (NASDAQ:PCAR) designs and manufactures commercial trucks of various weights and sizes for the commercial trucking industry.
Why Is PCAR Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Forecasted revenue decline of 8.7% for the upcoming 12 months implies demand will fall off a cliff
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 1.7% annually
PACCAR’s stock price of $93.29 implies a valuation ratio of 15.8x forward P/E. Read our free research report to see why you should think twice about including PCAR in your portfolio.
Two Stocks to Buy:
Lululemon (LULU)
Net Cash Position: $408.5 million (1.1% of Market Cap)
Originally serving yogis and hockey players, Lululemon (NASDAQ:LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Why Is LULU a Good Business?
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 8.2% growth over the past two years
- Differentiated product assortment is reflected in its best-in-class gross margin of 58.8%
- LULU is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Lululemon is trading at $317.93 per share, or 20.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Natera (NTRA)
Net Cash Position: $808.2 million (3.8% of Market Cap)
Founded in 2003 as Gene Security Network before rebranding in 2012, Natera (NASDAQ:NTRA) develops and commercializes genetic tests for prenatal screening, cancer detection, and organ transplant monitoring using its proprietary cell-free DNA technology.
Why Will NTRA Outperform?
- Tests Processed averaged 23.1% growth over the past two years and imply healthy demand for its products
- Adjusted operating margin profits increased over the last two years as the company gained some leverage on its fixed costs and became more efficient
- Free cash flow profile has moved into positive territory over the last five years, indicating the company has achieved financial self-sustainability
At $157.58 per share, Natera trades at 10.4x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.