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.
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 is one company with a net cash position that can leverage its balance sheet to grow and two with hidden risks.
Two Stocks to Sell:
Robert Half (RHI)
Net Cash Position: $99.84 million (2.4% of Market Cap)
With roots dating back to 1948 as the first specialized recruiting firm for accounting and finance professionals, Robert Half (NYSE: RHI) provides specialized talent solutions and business consulting services, connecting skilled professionals with companies across various fields.
Why Do We Steer Clear of RHI?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 1.5% annually over the last five years
- Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 11.9% annually, worse than its revenue
- Diminishing returns on capital suggest its earlier profit pools are drying up
Robert Half’s stock price of $41.64 implies a valuation ratio of 15.4x forward P/E. Dive into our free research report to see why there are better opportunities than RHI.
M&T Bank (MTB)
Net Cash Position: $8.49 billion (29.1% of Market Cap)
Tracing its roots back to 1856 when it was founded as Manufacturers and Traders Bank in Buffalo, New York, M&T Bank (NYSE: MTB) is a regional bank holding company that provides retail and commercial banking, trust, wealth management, and investment services to consumers and businesses.
Why Are We Hesitant About MTB?
- Muted 1% annual revenue growth over the last two years shows its demand lagged behind its bank peers
- Estimated net interest income growth of 4.6% for the next 12 months implies demand will slow from its four-year trend
- Estimated tangible book value per share growth of 4.2% for the next 12 months implies profitability will slow from its two-year trend
At $181.70 per share, M&T Bank trades at 1.1x forward P/B. If you’re considering MTB for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Braze (BRZE)
Net Cash Position: $452 million (15.2% of Market Cap)
Founded in 2011 after the co-founders met at NYC Disrupt Hackathon, Braze (NASDAQ: BRZE) is a customer engagement software platform that allows brands to connect with customers through data-driven and contextual marketing campaigns.
Why Are We Positive On BRZE?
- Ability to secure long-term commitments with customers is evident in its 23.1% ARR growth over the last year
- Forecasted revenue growth of 18.5% for the next 12 months indicates its momentum over the last three years is sustainable
- Operating margin improvement of 8.5 percentage points over the last year demonstrates its ability to scale efficiently
Braze is trading at $26.80 per share, or 3.8x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. 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).
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