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23 April 2021
By Maynard Paton
I like companies that boast significant net cash. My reasons include:
- Limited risk of funding difficulties should trouble strike;
- Management might be sensible by holding ‘rainy day’ money;
- The cash position may have resulted from superb profit generation, and;
- The share price could be less volatile (especially if the cash position represents a large part of the market cap).
I therefore applied the following filter criteria within SharePad to identify some reasonable cash-flush businesses:
- Trailing twelve-month net borrowings of no more than zero (i.e. a net cash position);
- A market cap of at least £50 million;
- Net cash of at least 10% of the market cap, and;
- A trailing twelve-month operating margin of at least 1% (to include only profitable companies).
I found 38 matches, and Venture Life attracted my attention because the company:
- Carried a significant 28% of its market cap as net cash;
- Operated within the generally favourable healthcare sector, and;
- Published impressive results last month.
Read my full Venture Life article for SharePad.
Maynard Paton
