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.
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 balance growth with stability and one with hidden risks.
One Stock to Sell:
MarketAxess (MKTX)
Net Cash Position: $435 million (6.3% of Market Cap)
Pioneering the shift from phone-based to electronic bond trading since 2000, MarketAxess (NASDAQ: MKTX) operates electronic trading platforms that enable institutional investors and broker-dealers to efficiently trade fixed-income securities like corporate and government bonds.
Why Should You Sell MKTX?
- Annual revenue growth of 6.4% over the last five years was below our standards for the financials sector
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.7% annually
MarketAxess is trading at $187.31 per share, or 23.2x forward P/E. Read our free research report to see why you should think twice about including MKTX in your portfolio.
Two Stocks to Buy:
Sea (SE)
Net Cash Position: $5.22 billion (4.7% of Market Cap)
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Why Are We Bullish on SE?
- Paying Users have increased by an average of 15.3% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per user by 12.9% annually
- Free cash flow margin jumped by 36.4 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $187 per share, Sea trades at 66.4x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Skyward Specialty Insurance (SKWD)
Net Cash Position: $53.61 million (2.7% of Market Cap)
Founded in 2006 to serve markets where standard insurance coverage falls short, Skyward Specialty Insurance (NASDAQ: SKWD) provides customized commercial property, casualty, and health insurance solutions for underserved or specialized market niches.
Why Will SKWD Outperform?
- Net premiums earned expanded by 28.2% annually over the last two years, demonstrating exceptional market penetration this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 46.9% annually, topping its revenue gains
- Annual book value per share growth of 26.6% over the past two years was outstanding, reflecting strong capital accumulation this cycle
Skyward Specialty Insurance’s stock price of $49 implies a valuation ratio of 2.1x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% 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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