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.
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 are two companies with net cash positions that can leverage their balance sheets to grow and one with hidden risks.
One Stock to Sell:
The Marzetti Company (MZTI)
Net Cash Position: $141.1 million (3% of Market Cap)
Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ: MZTI) sells bread, dressing, and dips to the retail and food service channels.
Why Are We Wary of MZTI?
- Sales trends were unexciting over the last three years as its 4% annual growth was below the typical consumer staples company
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its three-year trend
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 23.4%
The Marzetti Company’s stock price of $167.94 implies a valuation ratio of 23.6x forward P/E. To fully understand why you should be careful with MZTI, check out our full research report (it’s free).
Two Stocks to Watch:
MACOM (MTSI)
Net Cash Position: $285.4 million (1.9% of Market Cap)
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Are We Fans of MTSI?
- Annual revenue growth of 22.1% over the last two years was superb and indicates its market share increased during this cycle
- Superior product capabilities and pricing power result in a top-tier gross margin of 54.4%
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 29.1% annually
At $198.14 per share, MACOM trades at 41.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
SouthState (SSB)
Net Cash Position: $684 million (7% of Market Cap)
With roots dating back to the Great Depression era of 1933, SouthState (NYSE: SSB) is a financial holding company that provides banking services, wealth management, and correspondent banking services across six southeastern states.
Why Do We Like SSB?
- Market share has increased this cycle as its 24.9% annual net interest income growth over the last five years was exceptional
- Net interest margin expanded by 29.3 basis points (100 basis points = 1 percentage point) over the last two years, providing additional flexibility for investments
- Efficiency ratio improved by 11.4 percentage points over the last five years as it scaled
SouthState is trading at $96.91 per share, or 1.1x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
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 5 Growth Stocks for this month. 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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
