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.
Just because a business has cash doesn’t mean it’s a good investment. Luckily, StockStory is here to help you separate the winners from the losers. Keeping that in mind, here are two companies with net cash positions that balance growth with stability and one that may struggle.
One Stock to Sell:
Root (ROOT)
Net Cash Position: $487.3 million (60.5% of Market Cap)
Pioneering a data-driven approach that rewards good driving habits, Root (NASDAQ: ROOT) is a technology-driven auto insurance company that uses mobile apps to acquire customers and data science to price policies based on individual driving behavior.
Why Does ROOT Worry Us?
- Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 24.6% annually over the last five years
- Negative return on equity shows that some of its growth strategies have backfired
Root is trading at $51.55 per share, or 2.2x forward P/B. If you’re considering ROOT for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
monday.com (MNDY)
Net Cash Position: $1.50 billion (44.4% of Market Cap)
With its colorful interface of boards, columns, and automation that replaced the chaos of spreadsheets, monday.com (NASDAQ: MNDY) is a cloud-based work operating system that helps teams manage projects, track tasks, and streamline workflows through customizable interfaces.
Why Is MNDY a Top Pick?
- Ability to secure long-term commitments with customers is evident in its 26.9% ARR growth over the last year
- Software is difficult to replicate at scale and results in a best-in-class gross margin of 89.2%
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
monday.com’s stock price of $66.69 implies a valuation ratio of 2.4x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Globus Medical (GMED)
Net Cash Position: $455.7 million (3.6% of Market Cap)
With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE: GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.
Why Are We Fans of GMED?
- Business is well-positioned no matter the global macroeconomic backdrop as its constant currency revenue growth averaged 22.3% over the past two years
- Earnings per share have massively outperformed its peers over the last five years, increasing by 22.8% annually
- Strong free cash flow margin of 16.5% enables it to reinvest or return capital consistently
At $92.78 per share, Globus Medical trades at 21.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
