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.
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 can continue growing sustainably and two with hidden risks.
Two Stocks to Sell:
Udemy (UDMY)
Net Cash Position: $359.5 million (47% of Market Cap)
With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ: UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.
Why Is UDMY Not Exciting?
- Focus on expanding its platform came at the expense of monetization as its average revenue per buyer fell by 1.7% annually
- Projected sales are flat for the next 12 months, implying demand will slow from its three-year trend
- Excessive marketing spend signals little organic demand and traction for its platform
At $5.22 per share, Udemy trades at 8.3x forward EV/EBITDA. To fully understand why you should be careful with UDMY, check out our full research report (it’s free for active Edge members).
Magnachip (MX)
Net Cash Position: $66.62 million (62.6% of Market Cap)
With its technology found in common consumer electronics such as TVs and smartphones, Magnachip Semiconductor (NYSE: MX) is a provider of analog and mixed-signal semiconductors.
Why Do We Pass on MX?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 17.2% annually over the last five years
- Gross margin of 16.5% reflects its high production costs
- Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model
Magnachip is trading at $2.93 per share, or 0.6x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MX.
One Stock to Watch:
First BanCorp (FBP)
Net Cash Position: $700.3 million (22% of Market Cap)
Tracing its roots back to 1948 in San Juan, First BanCorp (NYSE: FBP) is a bank holding company that provides commercial banking, consumer financing, mortgage services, and insurance products across Puerto Rico, the U.S. mainland, and the Caribbean.
Why Could FBP Be a Winner?
- Differentiated product suite is reflected in its Strong performance of its loan book leads to a High-yielding loan book and low cost of funds lead to a best-in-class net interest margin of 4.5%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 41.7% exceeded its revenue gains over the last five years
- Annual tangible book value per share growth of 28.4% over the past two years was outstanding, reflecting strong capital accumulation this cycle
First BanCorp’s stock price of $20.16 implies a valuation ratio of 1.6x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 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 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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