1 Cash-Heavy Stock for Long-Term Investors and 2 We Ignore
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. That said, here is one company with a net cash position that can continue growing sustainably and two that may struggle.
Two Stocks to Sell:
Privia Health (PRVA)
Net Cash Position: $403.5 million (15.5% of Market Cap)
Operating in 13 states and the District of Columbia with over 4,300 providers serving more than 4.8 million patients, Privia Health (NASDAQ:PRVA) is a technology-driven company that helps physicians optimize their practices, improve patient experiences, and transition to value-based care models.
Why Are We Cautious About PRVA?
- Modest revenue base of $2.36 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Low free cash flow margin of 4.7% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Push for growth has led to negative returns on capital, signaling value destruction
Privia Health is trading at $20.37 per share, or 19x forward P/E. To fully understand why you should be careful with PRVA, check out our full research report (it’s free).
Capital One (COF)
Net Cash Position: $16.1 billion (12.7% of Market Cap)
Starting as a credit card company in 1988 before expanding into a full-service bank, Capital One (NYSE:COF) is a financial services company that offers credit cards, auto loans, banking services, and commercial lending to consumers and businesses.
Why Does COF Fall Short?
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 4.4% annually
- Annual tangible book value per share declines of 1.6% for the past five years show its capital management struggled during this cycle
- Below-average return on equity indicates management struggled to find compelling investment opportunities
Capital One’s stock price of $206.00 implies a valuation ratio of 9.5x forward P/E. Check out our free in-depth research report to learn more about why COF doesn’t pass our bar.
One Stock to Buy:
Incyte (INCY)
Net Cash Position: $4.50 billion (18.2% of Market Cap)
Founded in 1991 and evolving from a genomics research firm to a commercial-stage drug developer, Incyte (NASDAQ:INCY) is a biopharmaceutical company that discovers, develops, and commercializes proprietary therapeutics for cancer and inflammatory diseases.
Why Will INCY Beat the Market?
- Annual revenue growth of 22.8% over the last two years was superb and indicates its market share increased during this cycle
- Free cash flow margin increased by 12.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Improving returns on capital reflect management’s ability to monetize investments
At $120.32 per share, Incyte trades at 51.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.