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 is one company with a net cash position that can continue growing sustainably and two with hidden risks.
Two Stocks to Sell:
Champion Homes (SKY)
Net Cash Position: $495.8 million (10.1% of Market Cap)
Founded in 1951, Champion Homes (NYSE: SKY) is a manufacturer of modular homes and buildings in North America.
Why Are We Cautious About SKY?
- Estimated sales growth of 2.6% for the next 12 months implies demand will slow from its two-year trend
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 3.2% annually while its revenue grew
- Diminishing returns on capital suggest its earlier profit pools are drying up
Champion Homes is trading at $88.70 per share, or 25.1x forward P/E. Dive into our free research report to see why there are better opportunities than SKY.
StoneX (SNEX)
Net Cash Position: $10.3 billion (202% of Market Cap)
Originally known as INTL FCStone until its 2020 rebranding, StoneX Group (NASDAQ: SNEX) provides a global financial services network connecting companies, traders, and investors to markets through clearing, execution, and advisory services.
Why Does SNEX Worry Us?
- Annual earnings per share growth of 1.7% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- Annual tangible book value per share growth of 6.5% over the last two years lagged behind its financials peers as its large balance sheet made it difficult to generate incremental capital growth
- Debt-to-equity ratio of 7.5× shows the firm has taken on excessive debt, leaving little room for error
At $97.46 per share, StoneX trades at 1.8x forward P/E. Check out our free in-depth research report to learn more about why SNEX doesn’t pass our bar.
One Stock to Watch:
Federated Hermes (FHI)
Net Cash Position: $5.72 million (0.1% of Market Cap)
With roots dating back to 1955 and a pioneering role in money market funds, Federated Hermes (NYSE: FHI) is an investment management firm that offers a wide range of funds and strategies for institutional and individual investors.
Why Does FHI Stand Out?
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 25% return on equity demonstrates management’s skill in finding high-return investments
Federated Hermes’s stock price of $52.19 implies a valuation ratio of 10.6x forward P/E. Is now a good time to buy? Find out in our full 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 5 Growth Stocks for this month. 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).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% 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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