Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
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. Keeping that in mind, here are two companies with net cash positions that balance growth with stability and one with hidden risks.
One Stock to Sell:
United Community Banks (UCB)
Net Cash Position: $405.9 million (10.3% of Market Cap)
Starting as a small community bank in 1950 and expanding through strategic acquisitions across the Southeast, United Community Banks (NYSE: UCB) is a regional bank holding company that provides financial services including loans, deposits, wealth management, and merchant services across the southeastern United States.
Why Does UCB Fall Short?
- 1.2% annual revenue growth over the last two years was slower than its banking peers
- Inferior net interest margin of 3.3% means it must compensate for lower profitability through increased loan originations
- Operational productivity has decreased over the last four years as its efficiency ratio worsened by 3.2 percentage points
United Community Banks is trading at $32.39 per share, or 1.1x forward P/B. Dive into our free research report to see why there are better opportunities than UCB.
Two Stocks to Watch:
MongoDB (MDB)
Net Cash Position: $2.31 billion (9% of Market Cap)
Named after "humongous database," reflecting its ability to handle massive data loads, MongoDB (NASDAQ: MDB) provides a flexible document-based database platform that helps developers build, deploy, and maintain modern applications more efficiently.
Why Does MDB Stand Out?
- Impressive 34.6% annual revenue growth over the last five years indicates it’s winning market share
- Customers view its software as mission-critical to their operations as its ARR has averaged 25.2% growth over the last year
MongoDB’s stock price of $317 implies a valuation ratio of 10.1x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Confluent (CFLT)
Net Cash Position: $832.9 million (12% of Market Cap)
Built by the original creators of Apache Kafka, the popular open-source messaging system, Confluent (NASDAQ: CFLT) provides a data infrastructure platform that enables organizations to connect their applications, systems, and data layers around real-time data streams.
Why Could CFLT Be a Winner?
- Billings growth has averaged 32.6% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Forecasted revenue growth of 16.3% for the next 12 months indicates its momentum over the last two years is sustainable
- Adequate gross margin of 74.2% gives it sufficient room to spend on marketing and product development
At $20.28 per share, Confluent trades at 5.6x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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