1 Cash-Heavy Stock to Own for Decades and 2 Facing Headwinds
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.
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 leverage its balance sheet to grow and two best left off your watchlist.
Two Stocks to Sell:
PubMatic (PUBM)
Net Cash Position: $96.87 million (11.4% of Market Cap)
Powering billions of daily ad impressions across the open internet, PubMatic (NASDAQ:PUBM) operates a technology platform that helps publishers maximize revenue from their digital advertising inventory while giving advertisers more control and transparency.
Why Do We Avoid PUBM?
- Competitive market dynamics make it difficult to retain customers, leading to a weak 96% net revenue retention rate
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Free cash flow margin is forecasted to shrink by 18.1 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
At $18.75 per share, PubMatic trades at 2.7x forward price-to-sales. Check out our free in-depth research report to learn more about why PUBM doesn’t pass our bar.
TechnipFMC (FTI)
Net Cash Position: $589.9 million (2.2% of Market Cap)
Operating a fleet of 16 specialized vessels that install equipment on the seafloor, TechnipFMC (NYSE:FTI) designs and manufactures subsea systems that control the flow of oil and natural gas from the ocean floor to processing facilities.
Why Does FTI Give Us Pause?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
- Gross margin of 18.7% is below its competitors, leaving less money to invest in exploration and production
TechnipFMC’s stock price of $68.61 implies a valuation ratio of 20.1x forward P/E. If you’re considering FTI for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Kratos (KTOS)
Net Cash Position: $1.25 billion (15.6% of Market Cap)
Established with a commitment to supporting national security, Kratos (NASDAQ:KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Will KTOS Outperform?
- Average organic revenue growth of 14.9% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Market share is on track to rise over the next 12 months as its 30.6% projected revenue growth implies demand will accelerate from its two-year trend
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 18.7% annually
Kratos is trading at $42.90 per share, or 47.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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.