2 Mid-Cap Stocks With Tons of Cash

With the stock market hovering around all-time highs, shares of unprofitable companies soaring, and bubbles in GameStop, electric vehicle stocks, cryptocurrencies, and likely other areas being inflated by rampant speculation, it can be all too easy to forget that a stock's true value is based on the fundamentals. Earnings, cash flow, and the balance sheet matter, even if they don't seem to matter all that much today.

Buying whatever stocks are popular and rising while ignoring the fundamentals is a strategy that works until it doesn't. "The market is like a large movie theatre with a small door," says Nassim Nicholas Taleb in Skin in the Game. "And the best way to detect a sucker ... is to see if his focus is on the size of the door or on that of the theater."

Many investors are piling into the hottest stocks at valuations that require some serious mental gymnastics to justify. That strategy worked last year following the pandemic-driven crash in March, and it's continued to work this year. But it won't work forever. When the euphoria fades, you'll want to own shares of companies that have the earnings and balance sheets to back up their valuations.

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Source Fool.com