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 that may struggle.
Two Stocks to Sell:
PlayStudios (MYPS)
Net Cash Position: $97.22 million (183% of Market Cap)
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
Why Do We Think MYPS Will Underperform?
- Annual sales declines of 4.1% for the past five years show its products and services struggled to connect with the market
- Poor free cash flow margin of 12.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
PlayStudios is trading at $4.43 per share, or 0.3x forward price-to-sales. Check out our free in-depth research report to learn more about why MYPS doesn’t pass our bar.
Cathay General Bancorp (CATY)
Net Cash Position: $2.34 billion (59.4% of Market Cap)
Founded in 1962 with its first branch in Los Angeles' Chinatown, Cathay General Bancorp (NASDAQ:CATY) operates Cathay Bank, providing commercial banking services to businesses and individuals with a strong presence in Asian-American communities.
Why Does CATY Worry Us?
- Net interest income trends were unexciting over the last five years as its 6.6% annual growth was below the typical banking firm
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 7.5% annually
- Projected tangible book value per share growth of 9.6% for the next 12 months suggests sluggish capital generation
Cathay General Bancorp’s stock price of $59.14 implies a valuation ratio of 1.3x forward P/B. Read our free research report to see why you should think twice about including CATY in your portfolio.
One Stock to Watch:
AMD (AMD)
Net Cash Position: $9.89 billion (0.9% of Market Cap)
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ:AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
Why Do We Like AMD?
- Market share has increased this cycle as its 25.4% annual revenue growth over the last five years was exceptional
- Projected revenue growth of 66.1% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Earnings per share grew by 22.6% annually over the last five years, comfortably beating the peer group average
At $646.95 per share, AMD trades at 58.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.