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7 Cash-Rich, Debt-Free Stocks to Buy to Clobber the Market

All of these seven companies have the same wonderful problem

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Cash-Rich Stocks to Buy: Healthequity (HQY)

Cash-Rich Stocks to Buy: Healthequity (HQY)
Source: Shutterstock

Cash-to-Market Cap: 6.3%

Healthequity Inc (NASDAQ:HQY) uses technology to help consumers successfully fund, invest in and spend their healthcare savings accounts (HSA). It finished fiscal 2017 with $180.4 million in cash and no long-term debt.

It also has earned a change of heart from yours truly.

In early January, I suggested that HQY was one of seven stocks to sell before they implode. Since then, it has lost about 4% — hardly an implosion for a stock that has gained 80% over the past 52 weeks.

So, what did I miss about this healthcare technology company?

In truth, I’m not sure I missed anything at all. At the time, my opinion was based on its very rich valuation as well as uncertainty about how the Trump administration would deal with HSAs. Fortunately, for companies like Healthequity, the American Health Care Act protects the expansion of HSAs.

“If enacted, it would be a win-win for employees and employers because it makes it easier for people to use their accounts and for employers to administer them,” said Steve Wojcik, vice president of public policy at the National Business Group on Health, which advocates for large employers. “It also would greatly increase the ability for both employers and employees to contribute funds to employees’ HSAs.”

Healthequity’s pristine balance sheet, combined with an increase in the annual limit for HSAs, tells me that this company’s future is very bright indeed.

While the repeal of Obamacare still has to go through the Senate, I like the direction the Republicans are taking as it relates to HSAs. Thus, HQY is now in a much better position than it was a few months ago.

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