1 Cash-Heavy Stock to Target This Week and 2 That Underwhelm

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. That said, 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:

Marqeta (MQ)

Net Cash Position: $591.7 million (27.3% of Market Cap)

Powering the cards behind innovative fintech services like Block's Cash App, Marqeta (NASDAQ:MQ) provides a cloud-based platform that allows businesses to create customized payment card programs and process card transactions.

Why Does MQ Worry Us?

1. Software offerings aren’t resonating in this new AI paradigm as its revenue declined by 12.1% annually over the last two years
2. Gross margin of 70.6% reflects its relatively high servicing costs
3. Operating margin declined by 4 percentage points over the last year as its sales cratered

Marqeta’s stock price of $4.99 implies a valuation ratio of 3.1x forward price-to-sales. Check out our free in-depth research report to learn more about why MQ doesn’t pass our bar.

Markel Group (MKL)

Net Cash Position: $332.1 million (1.2% of Market Cap)

Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE:MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.

Why Do We Think Twice About MKL?

1. Scale presents growth limitations compared to smaller competitors, evidenced by its below-average 2.4% annualized growth in net premiums earned for the last two years
2. Estimated sales growth of 1.4% for the next 12 months implies demand will slow from its two-year trend
3. Earnings per share lagged its peers over the last two years as they only grew by 13.2% annually

Markel Group is trading at $2,165 per share, or 1.5x forward P/B. If you’re considering MKL for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

Palomar Holdings (PLMR)

Net Cash Position: $111.7 million (3.1% of Market Cap)

Founded in 2013 to fill gaps in catastrophe insurance markets, Palomar Holdings (NASDAQ:PLMR) is a specialty insurance provider that offers property and casualty insurance products in underserved markets, with a focus on earthquake coverage.

Why Do We Love PLMR?

1. Net premiums earned surged by 46.1% annually over the past two years, reflecting strong market share gains this cycle
2. Annual book value per share growth of 39.5% over the last two years was superb and indicates its capital strength increased during this cycle
3. Expected book value per share growth of 25.4% for the next year suggests its capital position will strengthen considerably

At $133.70 per share, Palomar Holdings trades at 3.7x forward P/B. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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