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.
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. Keeping that in mind, here is one company with a net cash position that can continue growing sustainably and two with hidden risks.
Two Stocks to Sell:
Sprout Social (SPT)
Net Cash Position: $31.32 million (7.3% of Market Cap)
Born from the recognition that businesses needed a centralized way to handle their growing social media presence, Sprout Social (NASDAQ: SPT) provides a comprehensive software platform that helps businesses manage, analyze, and optimize their presence across various social media networks.
Why Are We Cautious About SPT?
- Offerings struggled to generate meaningful interest as its average billings growth of 11.1% over the last year did not impress
- Estimated sales growth of 10.9% for the next 12 months implies demand will slow from its two-year trend
- Rapid expansion strategy came at the expense of operating margin profitability
Sprout Social’s stock price of $7.15 implies a valuation ratio of 0.8x forward price-to-sales. If you’re considering SPT for your portfolio, see our FREE research report to learn more.
Vishay Precision (VPG)
Net Cash Position: $42.89 million (7% of Market Cap)
Emerging from Vishay Intertechnology in 2010, Vishay Precision (NYSE: VPG) operates as a global provider of precision measurement and sensing technologies.
Why Should You Dump VPG?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 7% annually over the last two years
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 16.2% annually while its revenue grew
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Vishay Precision is trading at $46.45 per share, or 57.5x forward P/E. To fully understand why you should be careful with VPG, check out our full research report (it’s free).
One Stock to Buy:
Datadog (DDOG)
Net Cash Position: $3.20 billion (7.4% of Market Cap)
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Are We Backing DDOG?
- ARR growth averaged 27.6% over the last year, showing customers are willing to take multi-year bets on its software
- Software is difficult to replicate at scale and results in a premier gross margin of 80%
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
At $121.82 per share, Datadog trades at 10.9x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 9 Market-Beating Stocks. 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.
