Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here are two companies with net cash positions that balance growth with stability and one that may struggle.
One Stock to Sell:
First Hawaiian Bank (FHB)
Net Cash Position: $899 million (29.4% of Market Cap)
Dating back to 1858 as Hawaii's oldest bank with deep roots in the Pacific island communities, First Hawaiian (NASDAQ:FHB) operates a full-service community bank providing deposit accounts, commercial and consumer loans, credit cards, and wealth management services across Hawaii, Guam, and Saipan.
Why Is FHB Not Exciting?
- Net interest income trends were unexciting over the last five years as its 4% annual growth was below the typical bank company
- Weak unit economics are reflected in its net interest margin of 3%, one of the worst among bank companies
- Flat tangible book value per share over the last five years suggest it must find different ways to enhance shareholder value during this cycle
At $24.53 per share, First Hawaiian Bank trades at 1.1x forward P/B. If you’re considering FHB for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
MercadoLibre (MELI)
Net Cash Position: $1.85 billion (1.5% of Market Cap)
Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Do We Love MELI?
- Unique Active Buyers have increased by an average of 19.7% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Platform’s growing usage and its ability to increase user spending by 16.9% annually showcases its high switching costs
- MELI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
MercadoLibre is trading at $2,381 per share, or 27.7x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Limbach (LMB)
Net Cash Position: $744,000
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Is LMB Interesting?
- Operating margin expansion of 5.3 percentage points over the last five years shows the company optimized its expenses
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 53.3% over the last two years outstripped its revenue performance
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
Limbach’s stock price of $138.50 implies a valuation ratio of 33.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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.
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