1 Cash-Heavy Stock with Competitive Advantages and 2 We Avoid

A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.

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 continue growing sustainably and two best left off your watchlist.

Two Stocks to Sell:

Lennar (LEN)

Net Cash Position: $849.8 million (2.4% of Market Cap)

One of the largest homebuilders in America, Lennar (NYSE:LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.

Why Should You Dump LEN?

1. Backlog has dropped by 20.4% on average over the past two years, suggesting it’s losing orders as competition picks up
2. Incremental sales over the last two years were much less profitable as its earnings per share fell by 11.4% annually while its revenue grew
3. 13.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Lennar is trading at $138.55 per share, or 13x forward P/E. Dive into our free research report to see why there are better opportunities than LEN.

T. Rowe Price (TROW)

Net Cash Position: $2.79 billion (11.4% of Market Cap)

Founded in 1937 by Thomas Rowe Price Jr., who pioneered the growth stock investing approach, T. Rowe Price (NASDAQ:TROW) is an investment management firm that offers mutual funds, advisory services, and retirement planning solutions to individuals and institutions.

Why Do We Think Twice About TROW?

1. Sales trends were unexciting over the last five years as its 4.3% annual growth was below the typical financials company
2. Annual earnings per share growth of 2.8% underperformed its revenue over the last five years, showing its incremental sales were less profitable

T. Rowe Price’s stock price of $111.48 implies a valuation ratio of 13.7x forward P/E. Check out our free in-depth research report to learn more about why TROW doesn’t pass our bar.

One Stock to Watch:

Grand Canyon Education (LOPE)

Net Cash Position: $266.1 million (4.7% of Market Cap)

Founded in 1949, Grand Canyon Education (NASDAQ:LOPE) is an educational services provider known for its operation at Grand Canyon University.

Why Could LOPE Be a Winner?

1. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 26.8%
2. Industry-leading 31.8% return on capital demonstrates management’s skill in finding high-return investments, and its rising returns show it’s making even more lucrative bets
3. Rising returns on capital show management is finding more attractive investment opportunities

At $207.60 per share, Grand Canyon Education trades at 22.4x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

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Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. 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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