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.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. That said, here are three companies with net cash positions to steer clear of and a few alternatives to consider.
MasterCraft (MCFT)
Net Cash Position: $65.4 million (21.8% of Market Cap)
Started by a waterskiing instructor, MasterCraft (NASDAQ: MCFT) specializes in designing, manufacturing, and selling sport boats.
Why Should You Sell MCFT?
- Performance surrounding its boats sold has lagged its peers
- Low free cash flow margin of 11.1% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
MasterCraft’s stock price of $18.44 implies a valuation ratio of 14.2x forward P/E. If you’re considering MCFT for your portfolio, see our FREE research report to learn more.
Sanmina (SANM)
Net Cash Position: $625.8 million (7.1% of Market Cap)
Founded in 1980, Sanmina (NASDAQ: SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.
Why Are We Hesitant About SANM?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.6% annually over the last two years
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 8.3%
- Earnings per share have dipped by 1.2% annually over the past two years, which is concerning because stock prices follow EPS over the long term
Sanmina is trading at $163.38 per share, or 16.4x forward P/E. To fully understand why you should be careful with SANM, check out our full research report (it’s free for active Edge members).
Butterfield Bank (NTB)
Net Cash Position: $1.46 billion (73.5% of Market Cap)
Founded in 1784 as one of the oldest banks in the Western Hemisphere, Butterfield Bank (NYSE: NTB) provides banking, wealth management, and trust services to individuals and businesses in select offshore financial centers including Bermuda, Cayman Islands, and the Channel Islands.
Why Does NTB Fall Short?
- Sales trends were unexciting over the last two years as its 1.6% annual growth was below the typical banking company
- Net interest income is projected to tank by 43% over the next 12 months as demand evaporates
- Net interest margin of 2.7% is well below other banks, signaling its loans aren’t very profitable
At $49.20 per share, Butterfield Bank trades at 1.8x forward P/B. Check out our free in-depth research report to learn more about why NTB doesn’t pass our bar.
Stocks We Like More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
