A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. That said, here is one company with a net cash position that can continue growing sustainably and two that may struggle.
Two Stocks to Sell:
nCino (NCNO)
Net Cash Position: $89.81 million (4.7% of Market Cap)
Born from the internal technology needs of a community bank in 2011, nCino (NASDAQ: NCNO) provides cloud-based software that helps financial institutions streamline client onboarding, loan origination, and account opening processes.
Why Does NCNO Fall Short?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 9.5% underwhelmed
- Estimated sales growth of 7.6% for the next 12 months implies demand will slow from its two-year trend
- Gross margin of 61.6% reflects its relatively high servicing costs
nCino’s stock price of $17.51 implies a valuation ratio of 2.9x forward price-to-sales. To fully understand why you should be careful with NCNO, check out our full research report (it’s free).
Lindsay (LNN)
Net Cash Position: $39.86 million (3.4% of Market Cap)
A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE: LNN) provides a variety of proprietary water management and road infrastructure products and services.
Why Should You Dump LNN?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Earnings per share have dipped by 11.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $115.46 per share, Lindsay trades at 19.9x forward P/E. Read our free research report to see why you should think twice about including LNN in your portfolio.
One Stock to Watch:
Cactus (WHD)
Net Cash Position: $189.1 million (5.2% of Market Cap)
Named for the spiky wellhead equipment that reminded founders of desert cacti, Cactus (NYSE: WHD) manufactures wellheads, valves, and spoolable pipes used in drilling and producing oil and gas wells.
Why Do We Like WHD?
- Annual revenue growth of 23.2% over the past nine years was outstanding, reflecting market share gains this cycle
- EBITDA margin improvement of 2.3 percentage points over the last five years demonstrates its ability to scale efficiently
- WHD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Cactus is trading at $52.59 per share, or 18.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
