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.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. That said, here are two companies with net cash positions that can continue growing sustainably and one with hidden risks.
One Stock to Sell:
Landstar (LSTR)
Net Cash Position: $340.7 million (7.3% of Market Cap)
Covering billions of miles throughout North America, Landstar (NASDAQ: LSTR) is a transportation company specializing in freight and last-mile delivery services.
Why Do We Steer Clear of LSTR?
- Annual sales declines of 12.7% for the past two years show its products and services struggled to connect with the market during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
Landstar is trading at $134.36 per share, or 24.2x forward P/E. If you’re considering LSTR for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
Monolithic Power Systems (MPWR)
Net Cash Position: $1.15 billion (2.8% of Market Cap)
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Is MPWR a Top Pick?
- Annual revenue growth of 17.3% over the past two years was outstanding, reflecting market share gains this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
- Industry-leading 45.9% return on capital demonstrates management’s skill in finding high-return investments
Monolithic Power Systems’s stock price of $848.13 implies a valuation ratio of 47.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Nvidia (NVDA)
Net Cash Position: $46.49 billion (1.1% of Market Cap)
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ: NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Why Are We Backing NVDA?
- Annual revenue growth of 125% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 79.5% to outpace its revenue gains
- Strong free cash flow margin of 45.4% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
At $171.30 per share, Nvidia trades at 31.5x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking 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 ServiceNow (+178% 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
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