A clean balance sheet can signal disciplined management and stability. It also means a company can expand and thrive without relying on borrowed capital.
Even among the companies with sound capital structures, only a few stand out, and we’re here to help you identify them. Keeping that in mind, here are three companies with net cash positions that balance growth with stability.
CoStar (CSGP)
Net Cash Position: $914 million (3.2% of Market Cap)
With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ: CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.
Why Do We Watch CSGP?
- Impressive 14% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Economies of scale give it some operating leverage when demand rises
- Market share is on track to rise over the next 12 months as its 21.3% projected revenue growth implies demand will accelerate from its two-year trend
At $66.13 per share, CoStar trades at 55.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
RLI (RLI)
Net Cash Position: $173.7 million (3% of Market Cap)
Founded in 1965 and named after its original focus on "replacement lens insurance" for contact lens wearers, RLI (NYSE: RLI) is a specialty insurance company that underwrites property, casualty, and surety products through wholesale brokers, independent agents, and carrier partnerships.
Why Is RLI Interesting?
- Annual revenue growth of 14.5% over the past five years was outstanding, reflecting market share gains this cycle
- Net premiums earned surged by 13.3% annually over the past two years, reflecting strong market share gains this cycle
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
RLI’s stock price of $63.36 implies a valuation ratio of 3.2x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Live Oak Bancshares (LOB)
Net Cash Position: $787.7 million (57.2% 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 Bullish on LOB?
- Annual net interest income growth of 19.9% over the last five years was superb and indicates its market share increased during this cycle
- Anticipated efficiency ratio improvement of -5.8 percentage points over the next year signals it will gain leverage on its fixed costs and become more productive
- Earnings per share grew by 12.9% annually over the last five years, massively outpacing its peers
Live Oak Bancshares is trading at $29.98 per share, or 1.2x 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.
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