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 balances growth with stability and two best left off your watchlist.
Two Stocks to Sell:
G-III (GIII)
Net Cash Position: $100.7 million (6.7% of Market Cap)
Founded as a small leather goods business, G-III (NASDAQ: GIII) is a fashion and apparel conglomerate with a diverse portfolio of brands.
Why Do We Think GIII Will Underperform?
- Sales trends were unexciting over the last five years as its 6% annual growth was below the typical consumer discretionary company
- Incremental sales over the last five years were less profitable as its 3.5% annual earnings per share growth lagged its revenue gains
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
G-III’s stock price of $34.08 implies a valuation ratio of 14.4x forward P/E. Read our free research report to see why you should think twice about including GIII in your portfolio.
Live Oak Bancshares (LOB)
Net Cash Position: $716.6 million (40.1% of Market Cap)
Founded during the 2008 financial crisis with a vision to reimagine small business banking through technology, Live Oak Bancshares (NYSE: LOB) is a bank holding company that specializes in providing online banking services and SBA-guaranteed loans to small businesses across targeted industries nationwide.
Why Are We Cautious About LOB?
- Weak unit economics are reflected in its net interest margin of 3.3%, one of the worst among bank companies
- Earnings per share fell by 2.3% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Live Oak Bancshares is trading at $38.01 per share, or 1.4x forward P/B. If you’re considering LOB for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Houlihan Lokey (HLI)
Net Cash Position: $633.6 million (6.8% of Market Cap)
Founded in 1972 and known for its expertise in complex financial situations, Houlihan Lokey (NYSE: HLI) is a global investment bank specializing in mergers and acquisitions, capital markets, financial restructurings, and valuation advisory services.
Why Are We Bullish on HLI?
- Market share has increased this cycle as its 16.9% annual revenue growth over the last two years was exceptional
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 29.7% over the last two years outstripped its revenue performance
- Impressive 20.1% annual tangible book value per share growth over the last two years indicates it’s building equity value this cycle
At $141.45 per share, Houlihan Lokey trades at 17.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
