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.
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 balances growth with stability and two best left off your watchlist.
Two Stocks to Sell:
Applied Materials (AMAT)
Net Cash Position: $2.02 billion (1% of Market Cap)
Founded in 1967 as the first company to develop tools for other businesses in the semiconductor industry, Applied Materials (NASDAQ: AMAT) is the largest provider of semiconductor wafer fabrication equipment.
Why Are We Wary of AMAT?
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
At $258.75 per share, Applied Materials trades at 27.6x forward P/E. Dive into our free research report to see why there are better opportunities than AMAT.
Enphase (ENPH)
Net Cash Position: $274.4 million (6.5% of Market Cap)
The first company to successfully commercialize the solar micro-inverter, Enphase (NASDAQ: ENPH) manufactures software-driven home energy products.
Why Is ENPH Risky?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Earnings per share have dipped by 22.7% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- 9.2 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
Enphase is trading at $32.20 per share, or 16.1x forward P/E. To fully understand why you should be careful with ENPH, check out our full research report (it’s free for active Edge members).
One Stock to Watch:
Roku (ROKU)
Net Cash Position: $1.84 billion (11.3% of Market Cap)
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Why Do We Watch ROKU?
- Has the opportunity to boost monetization through new features and premium offerings as its total hours streamed have grown by 18.7% annually over the last two years
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 51.2% outpaced its revenue gains
- Free cash flow margin expanded by 14 percentage points over the last few years, providing additional flexibility for investments and share buybacks/dividends
Roku’s stock price of $110.76 implies a valuation ratio of 29x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
