1 Cash-Heavy Stock with Competitive Advantages and 2 That Underwhelm
A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
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. Keeping that in mind, here is one company with a net cash position that balances growth with stability and two with hidden risks.
Two Stocks to Sell:
Dillard's (DDS)
Net Cash Position: $803.9 million (8% of Market Cap)
With stores located largely in the Southern and Western US, Dillard’s (NYSE:DDS) is a department store chain that sells clothing, cosmetics, accessories, and home goods.
Why Are We Hesitant About DDS?
- Absence of new stores indicates weak demand as management focuses on improving existing location performance
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 6.4% annually, worse than its revenue
Dillard's is trading at $643.91 per share, or 18.8x forward P/E. Check out our free in-depth research report to learn more about why DDS doesn’t pass our bar.
Rogers (ROG)
Net Cash Position: $206.1 million (8.8% of Market Cap)
With roots dating back to 1832, making it one of America's oldest continuously operating companies, Rogers (NYSE:ROG) designs and manufactures specialized engineered materials and components used in electric vehicles, telecommunications, renewable energy, and other high-performance applications.
Why Should You Sell ROG?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Earnings per share have dipped by 12.3% annually over the past five years, which is concerning because stock prices follow EPS over the long term
- Underwhelming 4.4% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
At $131.08 per share, Rogers trades at 31.1x forward P/E. If you’re considering ROG for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
LegalZoom (LZ)
Net Cash Position: $152.1 million (14.3% of Market Cap)
Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ:LZ) offers online legal services and documentation assistance for individuals and businesses.
Why Are We Fans of LZ?
- Has the opportunity to boost monetization through new features and premium offerings as its subscription units have grown by 10.7% annually over the last two years
- Platform’s growing usage and its ability to increase user spending by 17.2% annually showcases its high switching costs
- Excellent EBITDA margin of 23.1% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
LegalZoom’s stock price of $6.24 implies a valuation ratio of 4.6x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.