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. Keeping that in mind, here is one company with a net cash position that can leverage its balance sheet to grow and two with hidden risks.

Two Stocks to Sell:

Marqeta (MQ)

Net Cash Position: $988.4 million (35.3% of Market Cap)

Founded by CEO Jason Gardner in 2009, Marqeta (NASDAQ: MQ) is an innovative card issuer that provides companies with the ability to issue and process virtual, physical, and tokenized credit and debit cards.

Why Does MQ Give Us Pause?

1. Software offerings aren’t resonating in this new AI paradigm as its revenue declined by 2.8% annually over the last three years
2. High servicing costs result in a relatively inferior gross margin of 69.4% that must be offset through increased usage

At $5.98 per share, Marqeta trades at 4.9x forward price-to-sales. Check out our free in-depth research report to learn more about why MQ doesn’t pass our bar.

Coursera (COUR)

Net Cash Position: $744.9 million (55.3% of Market Cap)

Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.

Why Are We Wary of COUR?

1. Focus on expanding its platform came at the expense of monetization as its average revenue per customer fell by 5.2% annually
2. Estimated sales growth of 4.1% for the next 12 months implies demand will slow from its three-year trend
3. Expensive marketing campaigns hurt its profitability and make us wonder what would happen if it let up on the gas

Coursera’s stock price of $8.40 implies a valuation ratio of 23.7x forward EV/EBITDA. Read our free research report to see why you should think twice about including COUR in your portfolio.

One Stock to Watch:

Cincinnati Financial (CINF)

Net Cash Position: $107 million (0.5% of Market Cap)

Founded in 1950 by independent insurance agents seeking stable market options for their clients, Cincinnati Financial (NASDAQ: CINF) provides property casualty insurance, life insurance, and related financial services through independent agencies across 46 states.

Why Does CINF Catch Our Eye?

1. Annual net premiums earned growth of 10.9% over the past two years was outstanding, reflecting market share gains this cycle
2. Impressive 11.9% annual book value per share growth over the last five years indicates it’s building equity value this cycle
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

Cincinnati Financial is trading at $147.85 per share, or 1.6x forward P/B. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 Kadant (+351% 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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