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.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. Keeping that in mind, here is one company with a net cash position that balances growth with stability and two that may struggle.
Two Stocks to Sell:
Photronics (PLAB)
Net Cash Position: $588.1 million (27.5% of Market Cap)
Sporting a global footprint of facilities, Photronics (NASDAQ:PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Why Does PLAB Give Us Pause?
- Sales tumbled by 2.4% annually over the last two years, showing market trends are working against its favor during this cycle
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.1%
- Gross margin of 35.9% is below its competitors, leaving less money to invest in areas like marketing and R&D
At $36.16 per share, Photronics trades at 17.6x forward P/E. Read our free research report to see why you should think twice about including PLAB in your portfolio.
Grand Canyon Education (LOPE)
Net Cash Position: $166.4 million (3.4% of Market Cap)
Founded in 1949, Grand Canyon Education (NASDAQ:LOPE) is an educational services provider known for its operation at Grand Canyon University.
Why Do We Steer Clear of LOPE?
- Demand for its offerings was relatively low as its number of students has underwhelmed
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 7.4% annually
- Free cash flow margin is expected to increase by 1.1 percentage points next year, suggesting the company will have more capital to invest or return to shareholders
Grand Canyon Education’s stock price of $179.77 implies a valuation ratio of 18.8x forward P/E. If you’re considering LOPE for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Alphabet (GOOGL)
Net Cash Position: $61.78 billion (1.5% of Market Cap)
Started by Stanford students Larry Page and Sergey Brin in a Menlo Park garage, Alphabet (NASDAQ:GOOGL) is the parent company of the eponymous Google Search engine, Google Cloud Platform, and YouTube.
Why Is GOOGL a Good Business?
- Alphabet’s dominant Google Search sits on the pantheon of the best businesses ever. This is reflected in its robust long-term revenue growth and elite operating margin.
- The company’s profit margins have become even higher over time, speaking to its scale advantages and operating efficiency not only in its core Search business but also in Google Cloud Platform and YouTube.
- Revenue growth and increasing operating margins are the key ingredients for strong EPS growth. Google has these, and when also factoring in its share repurchases, you can see why EPS has exploded over the long term.
Alphabet is trading at $331.01 per share, or 30.7x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Check out the high-quality names we’ve flagged in 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 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.