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. That said, 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: $591.7 million (27.3% of Market Cap)
Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ: MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.
Why Does MQ Worry Us?
- Software offerings aren’t resonating in this new AI paradigm as its revenue declined by 12.1% annually over the last two years
- Gross margin of 70.6% reflects its relatively high servicing costs
- Operating margin declined by 4 percentage points over the last year as its sales cratered
Marqeta’s stock price of $4.99 implies a valuation ratio of 3.1x forward price-to-sales. Check out our free in-depth research report to learn more about why MQ doesn’t pass our bar.
Markel Group (MKL)
Net Cash Position: $332.1 million (1.2% of Market Cap)
Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE: MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.
Why Do We Think Twice About MKL?
- Scale presents growth limitations compared to smaller competitors, evidenced by its below-average 2.4% annualized growth in net premiums earned for the last two years
- Estimated sales growth of 1.4% for the next 12 months implies demand will slow from its two-year trend
- Earnings per share lagged its peers over the last two years as they only grew by 13.2% annually
Markel Group is trading at $2,165 per share, or 1.5x forward P/B. If you’re considering MKL for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Palomar Holdings (PLMR)
Net Cash Position: $111.7 million (3.1% of Market Cap)
Founded in 2013 to fill gaps in catastrophe insurance markets, Palomar Holdings (NASDAQ: PLMR) is a specialty insurance provider that offers property and casualty insurance products in underserved markets, with a focus on earthquake coverage.
Why Do We Love PLMR?
- Net premiums earned surged by 46.1% annually over the past two years, reflecting strong market share gains this cycle
- Annual book value per share growth of 39.5% over the last two years was superb and indicates its capital strength increased during this cycle
- Expected book value per share growth of 25.4% for the next year suggests its capital position will strengthen considerably
At $133.70 per share, Palomar Holdings trades at 3.7x forward P/B. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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