2 Cash-Heavy Stocks with Competitive Advantages and 1 to Ignore

Yahoo

30-06-2025

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.
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 are two companies with net cash positions that can continue growing sustainably and one with hidden risks.
Net Cash Position: $478.6 million (27% of Market Cap)
Founded in Bermuda in 2014 and designed to adapt nimbly to evolving market conditions, Fidelis Insurance (NYSE:FIHL) is a global specialty insurer and reinsurer that provides customized coverage across property, specialty, and bespoke risk solutions.
Why Is FIHL Risky?
Products and services are facing significant end-market challenges during this cycle as sales have declined by 11.2% annually over the last two years
Inability to adjust its cost structure while its revenue declined over the last two years led to a 55.6 percentage point drop in the company's combined ratio
Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 41.7% annually, worse than its revenue
At $16.27 per share, Fidelis Insurance trades at 0.7x forward P/B. To fully understand why you should be careful with FIHL, check out our full research report (it's free).
Net Cash Position: $5.19 billion (1.7% of Market Cap)
Started by Peter Thiel after seeing US defence agencies struggle in the aftermath of the 2001 terrorist attacks, Palantir (NYSE:PLTR) offers software as a service platform that helps government agencies and large enterprises use data to make better decisions.
Why Will PLTR Outperform?
Billings growth has averaged 38.6% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Strong free cash flow margin of 47.2% enables it to reinvest or return capital consistently
Palantir's stock price of $134.47 implies a valuation ratio of 80.4x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it's free.
Net Cash Position: $18 million (0.2% of Market Cap)
Developing submarine detection systems for the U.S. Navy, Leonardo DRS (NASDAQ:DRS) is a provider of defense systems, electronics, and military support services.
Why Does DRS Catch Our Eye?
Backlog has averaged 54.4% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
Incremental sales significantly boosted profitability as its annual earnings per share growth of 17.5% over the last two years outstripped its revenue performance
Free cash flow margin grew by 4.7 percentage points over the last five years, giving the company more chips to play with
Leonardo DRS is trading at $45.29 per share, or 41.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it's free.
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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-small-cap company Exlservice (+354% 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