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.
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 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:
F&G Annuities & Life (FG)
Net Cash Position: $282 million (8.8% of Market Cap)
Founded in 1959 and serving approximately 677,000 policyholders who rely on its financial protection products, F&G Annuities & Life (NYSE: FG) provides fixed annuities, life insurance, and pension risk transfer solutions to retail and institutional clients.
Why Does FG Worry Us?
- Efficiency has decreased over the last four years as its pre-tax profit margin fell by 21.6 percentage points
- Policy losses and capital returns have eroded its book value per share this cycle as its book value per share declined by 4.6% annually over the last four years
- ROE of 9.4% reflects management’s challenges in identifying attractive investment opportunities
F&G Annuities & Life is trading at $23.81 per share, or 0.6x forward P/B. Dive into our free research report to see why there are better opportunities than FG.
Ocular Therapeutix (OCUL)
Net Cash Position: $660.1 million (34.9% of Market Cap)
Pioneering a drug delivery platform that can eliminate the need for monthly eye injections, Ocular Therapeutix (NASDAQ: OCUL) develops sustained-release treatments for eye diseases using its proprietary ELUTYX bioresorbable hydrogel technology that gradually releases medication.
Why Do We Think OCUL Will Underperform?
- Annual sales declines of 5.7% for the past two years show its products and services struggled to connect with the market during this cycle
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 340.5 percentage points
Ocular Therapeutix’s stock price of $8.79 implies a valuation ratio of 34.8x forward price-to-sales. To fully understand why you should be careful with OCUL, check out our full research report (it’s free).
One Stock to Watch:
LegalZoom (LZ)
Net Cash Position: $188.7 million (17.4% of Market Cap)
Founded by famous lawyer Robert Shapiro, LegalZoom (NASDAQ: LZ) offers online legal services and documentation assistance for individuals and businesses.
Why Do We Like LZ?
- Subscription Units have grown by 12.5% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Switching costs of its platform were on full display over the last two years as it not only grew engagement but also increased the average revenue per user by 52.9% annually
- Free cash flow margin jumped by 11.2 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $6.31 per share, LegalZoom trades at 4.9x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
