A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. That said, here is one company with a net cash position that balances growth with stability and two with hidden risks.
Two Stocks to Sell:
Expeditors (EXPD)
Net Cash Position: $751.5 million (3.4% of Market Cap)
Expeditors (NYSE:EXPD) offers air and ocean freight as well as brokerage services.
Why Are We Wary of EXPD?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- High input costs result in an inferior gross margin of 13.5% that must be offset through higher volumes
- Waning returns on capital imply its previous profit engines are losing steam
At $166.74 per share, Expeditors trades at 24.9x forward P/E. Read our free research report to see why you should think twice about including EXPD in your portfolio.
CoStar (CSGP)
Net Cash Position: $242 million (2% of Market Cap)
With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ:CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.
Why Does CSGP Worry Us?
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 16.3 percentage points
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10.8 percentage points
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
CoStar is trading at $29.34 per share, or 19.4x forward P/E. Check out our free in-depth research report to learn more about why CSGP doesn’t pass our bar.
One Stock to Watch:
MACOM (MTSI)
Net Cash Position: $324 million (1.7% of Market Cap)
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Are We Fans of MTSI?
- Annual revenue growth of 29.8% over the last two years was superb and indicates its market share increased during this cycle
- Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 36.5% is above its two-year trend
- Earnings per share grew by 18.4% annually over the last five years and easily exceeded the peer group average
MACOM’s stock price of $255.92 implies a valuation ratio of 36.6x forward P/E. Is now a good time to buy? See for yourself in our full 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 meet 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.