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.
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. That said, here are two companies with net cash positions that can leverage their balance sheets to grow and one best left off your watchlist.
One Stock to Sell:
Monarch (MCRI)
Net Cash Position: $61.28 million (4.2% of Market Cap)
Established in 1993, Monarch (NASDAQ: MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.
Why Is MCRI Not Exciting?
- Lackluster 4% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Estimated sales growth of 2% for the next 12 months implies demand will slow from its two-year trend
- ROIC of 14.4% reflects management’s challenges in identifying attractive investment opportunities
Monarch is trading at $79.26 per share, or 8.1x forward EV-to-EBITDA. Read our free research report to see why you should think twice about including MCRI in your portfolio.
Two Stocks to Watch:
MACOM (MTSI)
Net Cash Position: $156.5 million (1.9% 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 Does MTSI Stand Out?
- Solid 6.6% annual revenue growth over the last two years indicates its offering’s solve complex business issues
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 21.2%
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 49.2% annually
At $112.29 per share, MACOM trades at 30.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Ibotta (IBTA)
Net Cash Position: $348.1 million (23.5% of Market Cap)
Originally launched as a way to make grocery shopping more rewarding for budget-conscious consumers, Ibotta (NYSE: IBTA) is a mobile shopping app that allows consumers to earn cash back on everyday purchases by completing tasks and submitting receipts.
Why Will IBTA Beat the Market?
- Market share has increased this cycle as its 32% annual revenue growth over the last two years was exceptional
- Increase in total redemptions shows customers are eagerly embracing its offerings
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 58.8% annually, topping its revenue gains
Ibotta’s stock price of $50.19 implies a valuation ratio of 13.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
