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.

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 can leverage their balance sheets to grow and one with hidden risks.

One Stock to Sell:

Tesla (TSLA)

Net Cash Position: $29.56 billion (2.2% of Market Cap)

Originally founded by Martin Eberhard and Marc Tarpenning in 2003, Tesla (NASDAQ: TSLA) is an electric vehicle company accelerating the world’s transition to sustainable energy.

Why Is TSLA Risky?

1. Tesla's scale advantage in EV production leads to gross margins that exceed incumbents such as General Motors and Ford. However, a softer macroeconomic backdrop and tariff pressures have weighed on automobile sales, which are highly cyclical.
2. The company's execution ability is a question mark given its long history of delays, such as the Cybertruck and Robotaxi launches. Its sizeable investments in projects with uncertain return timelines, like Optimus, also raise skepticism from investors.
3. On the bright side, Tesla's Megapack product solves a critical problem for utilities needing renewable energy storage solutions. This innovation has made the energy segment the most profitable and fastest-growing business line for the company.

At $428.34 per share, Tesla trades at 200.8x forward price-to-earnings. Check out our free in-depth research report to learn more about why TSLA doesn’t pass our bar.

Two Stocks to Watch:

Monster (MNST)

Net Cash Position: $1.87 billion (2.8% of Market Cap)

Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ: MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.

Why Are We Bullish on MNST?

1. Highly efficient business model is illustrated by its impressive 27.5% operating margin
2. Strong free cash flow margin of 22.6% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

Monster’s stock price of $68.06 implies a valuation ratio of 34.5x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.

ResMed (RMD)

Net Cash Position: $357.6 million (0.9% of Market Cap)

Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE: RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.

Why Could RMD Be a Winner?

1. Business is well-positioned no matter the global macroeconomic backdrop as its constant currency revenue growth averaged 10.3% over the past two years
2. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 14.9% outpaced its revenue gains
3. Free cash flow margin jumped by 12.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

ResMed is trading at $274.45 per share, or 25.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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