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
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.
