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 leverage its balance sheet to grow and two best left off your watchlist.

Two Stocks to Sell:

Zillow (ZG)

Net Cash Position: $830 million (4.1% of Market Cap)

Founded by Expedia co-founders Lloyd Frink and Rich Barton, Zillow (NASDAQ: ZG) is the leading U.S. online real estate marketplace.

Why Should You Dump ZG?

1. Annual revenue declines of 7.8% over the last five years indicate problems with its market positioning
2. Historical operating margin losses point to an inefficient cost structure
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

At $81.89 per share, Zillow trades at 43.2x forward P/E. Read our free research report to see why you should think twice about including ZG in your portfolio.

The Real Brokerage (REAX)

Net Cash Position: $54.77 million (5.8% of Market Cap)

Founded in Toronto, Canada in 2014, The Real Brokerage (NASDAQ: REAX) is a technology-driven real estate brokerage firm combining a tech-centric model with an agent-centric philosophy.

Why Is REAX Not Exciting?

1. Poor expense management has led to operating margin losses
2. Incremental sales over the last five years were less profitable as its earnings per share were flat while its revenue grew
3. Poor free cash flow margin of 3.4% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends

The Real Brokerage is trading at $4.52 per share, or 16.9x forward EV-to-EBITDA. If you’re considering REAX for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Blue Bird (BLBD)

Net Cash Position: $81.57 million (4.5% of Market Cap)

With around a century of experience, Blue Bird (NASDAQ: BLBD) is a manufacturer of school buses and complementary parts.

Why Are We Backing BLBD?

1. Impressive 14.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Additional sales over the last two years increased its profitability as the 317% annual growth in its earnings per share outpaced its revenue
3. Rising returns on capital show management is finding more attractive investment opportunities

Blue Bird’s stock price of $57.30 implies a valuation ratio of 14.1x forward P/E. Is now the right 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 Strong Momentum Stocks for this week. 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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