A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. That said, here is one company with a net cash position that can leverage its balance sheet to grow and two best left off your watchlist.
Two Stocks to Sell:
10x Genomics (TXG)
Net Cash Position: $439 million (16% of Market Cap)
Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ: TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.
Why Do We Think TXG Will Underperform?
- Sales trends were unexciting over the last two years as its 1.9% annual growth was below the typical healthcare company
- Smaller revenue base of $642.8 million means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Push for growth has led to negative returns on capital, signaling value destruction
10x Genomics’s stock price of $22 implies a valuation ratio of 4.7x forward price-to-sales. Dive into our free research report to see why there are better opportunities than TXG.
Novavax (NVAX)
Net Cash Position: $497.1 million (37.4% of Market Cap)
Pioneering a nanoparticle technology that mimics the molecular structure of disease pathogens, Novavax (NASDAQ: NVAX) develops and commercializes protein-based vaccines for infectious diseases, with a primary focus on its COVID-19 vaccine and combination respiratory vaccine candidates.
Why Is NVAX Not Exciting?
- Muted 6.9% annual revenue growth over the last two years shows its demand lagged behind its healthcare peers
- Projected sales decline of 66.2% for the next 12 months points to a tough demand environment ahead
- 45.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $8.11 per share, Novavax trades at 3.7x forward price-to-sales. If you’re considering NVAX for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Powell (POWL)
Net Cash Position: $500 million (5.4% of Market Cap)
Originally a metal-working shop supporting local petrochemical facilities, Powell (NYSE: POWL) has grown from a small Houston manufacturer to a global provider of electrical systems.
Why Are We Bullish on POWL?
- Annual revenue growth of 20.6% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 58.2% over the last two years outstripped its revenue performance
- Free cash flow margin grew by 22 percentage points over the last five years, giving the company more chips to play with
Powell is trading at $252.76 per share, or 42.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
