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.
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 three companies with net cash positions to avoid and some better alternatives instead.
Align Technology (ALGN)
Net Cash Position: $980.5 million (7.8% of Market Cap)
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ: ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Why Does ALGN Worry Us?
- Sales trends were unexciting over the last two years as its 2.2% annual growth was below the typical healthcare company
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 5.3 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $176.27 per share, Align Technology trades at 15.7x forward P/E. Dive into our free research report to see why there are better opportunities than ALGN.
Cincinnati Financial (CINF)
Net Cash Position: $499 million (1.9% of Market Cap)
Founded in 1950 by independent insurance agents seeking stable market options for their clients, Cincinnati Financial (NASDAQ: CINF) provides property casualty insurance, life insurance, and related financial services through independent agencies across 46 states.
Why Are We Hesitant About CINF?
- Earnings per share lagged its peers over the last two years as they only grew by 14.7% annually
- Estimated book value per share growth of 4.3% for the next 12 months implies profitability will slow from its two-year trend
Cincinnati Financial’s stock price of $164.79 implies a valuation ratio of 1.5x forward P/B. Read our free research report to see why you should think twice about including CINF in your portfolio.
Banner Bank (BANR)
Net Cash Position: $288.4 million (14.3% of Market Cap)
Founded in 1890 in Walla Walla, Washington, and evolving through more than a century of economic cycles, Banner Corporation (NASDAQ: BANR) operates Banner Bank, providing commercial banking services, loans, and financial products to individuals and businesses across Washington, Oregon, California, Idaho, and Utah.
Why Should You Dump BANR?
- Muted 4.1% annual net interest income growth over the last five years shows its demand lagged behind its banking peers
- Earnings per share fell by 1.5% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
- Estimated tangible book value per share growth of 9.3% for the next 12 months implies profitability will slow from its two-year trend
Banner Bank is trading at $59.40 per share, or 1x forward P/B. If you’re considering BANR for your portfolio, see our FREE research report to learn more.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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.
