Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here are two companies with net cash positions that balance growth with stability and one best left off your watchlist.
One Stock to Sell:
Lemonade (LMND)
Net Cash Position: $153.9 million (4.6% of Market Cap)
Built on the principle of giving back unused premiums to charitable causes selected by policyholders, Lemonade (NYSE: LMND) is a technology-driven insurance company that offers homeowners, renters, pet, car, and life insurance through an AI-powered digital platform.
Why Are We Cautious About LMND?
- Annual earnings per share growth of 8% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- Annual book value per share declines of 18.4% for the past five years show its capital management struggled during this cycle
- Push for growth has led to negative returns on capital, signaling value destruction
Lemonade is trading at $43.47 per share, or 7.2x forward P/B. Check out our free in-depth research report to learn more about why LMND doesn’t pass our bar.
Two Stocks to Watch:
MACOM (MTSI)
Net Cash Position: $292.6 million (1.4% of Market Cap)
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Are We Positive on MTSI?
- Market share has increased this cycle as its 30.9% annual revenue growth over the last two years was exceptional
- Sales outlook for the upcoming 12 months calls for 50% growth, an acceleration from its two-year trend
- Earnings per share grew by 18.1% annually over the last five years and easily exceeded the peer group average
At $267.90 per share, MACOM trades at 31.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Nubank (NU)
Net Cash Position: $7.72 billion (11% of Market Cap)
With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE: NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.
Why Are We Bullish on NU?
- Annual revenue growth of 41.1% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 48.7% annually, topping its revenue gains
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Nubank’s stock price of $14.52 implies a valuation ratio of 15.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth 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 meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.
