A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
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 is one company with a net cash position that can continue growing sustainably and two best left off your watchlist.
Two Stocks to Sell:
Rocket Lab (RKLB)
Net Cash Position: $65.95 million (0.3% of Market Cap)
Becoming the first private company in the Southern Hemisphere to reach space, Rocket Lab (NASDAQ:RKLB) offers rockets designed for launching small satellites.
Why Do We Think Twice About RKLB?
- Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution
Rocket Lab is trading at $47.59 per share, or 34x forward price-to-sales. Check out our free in-depth research report to learn more about why RKLB doesn’t pass our bar.
Regeneron (REGN)
Net Cash Position: $4.76 billion (7.7% of Market Cap)
Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ:REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.
Why Are We Cautious About REGN?
- Sizable revenue base leads to growth challenges as its 5.9% annual revenue increases over the last two years fell short of other healthcare companies
- Efficiency has decreased over the last five years as its adjusted operating margin fell by 21.4 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
Regeneron’s stock price of $598.69 implies a valuation ratio of 16.5x forward P/E. Dive into our free research report to see why there are better opportunities than REGN.
One Stock to Watch:
FB Financial (FBK)
Net Cash Position: $1.00 billion (34.2% of Market Cap)
Founded in 1906 and operating through more than a century of economic cycles, FB Financial (NYSE:FBK) operates FirstBank, providing commercial and consumer banking services across Tennessee, Kentucky, Alabama, and North Georgia.
Why Are We Positive On FBK?
- Market share has increased this cycle as its 14.4% annual net interest income growth over the last five years was exceptional
- Market share is on track to rise over the next 12 months as its 32.6% projected net interest income growth implies demand will accelerate from its five-year trend
- Earnings per share grew by 6% annually over the last two years and trumped its peers
At $54.29 per share, FB Financial trades at 1.4x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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