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 leverage its balance sheet to grow and two with hidden risks.
Two Stocks to Sell:
UFP Industries (UFPI)
Net Cash Position: $774.1 million (14.5% of Market Cap)
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ:UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
Why Is UFPI Risky?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $91.07 per share, UFP Industries trades at 16.3x forward P/E. Dive into our free research report to see why there are better opportunities than UFPI.
Align Technology (ALGN)
Net Cash Position: $917.3 million (9.3% of Market Cap)
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ:ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Why Are We Hesitant About ALGN?
- Disappointing clear aligner shipments over the past two years imply it may need to invest in improvements to get back on track
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 9.5 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
Align Technology’s stock price of $136.70 implies a valuation ratio of 12.6x forward P/E. Read our free research report to see why you should think twice about including ALGN in your portfolio.
One Stock to Watch:
Ameris Bancorp (ABCB)
Net Cash Position: $572.3 million (11.6% of Market Cap)
Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE:ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.
Why Could ABCB Be a Winner?
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 18.7% over the last two years outstripped its revenue performance
- Annual tangible book value per share growth of 13.9% over the last five years was superb and indicates its capital strength increased during this cycle
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Ameris Bancorp is trading at $73.26 per share, or 1.2x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% 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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