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:
ePlus (PLUS)
Net Cash Position: $350.8 million (18.6% of Market Cap)
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
Why Is PLUS Risky?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- Sales are projected to tank by 3.1% over the next 12 months as demand evaporates further
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
At $71.39 per share, ePlus trades at 18x forward P/E. To fully understand why you should be careful with PLUS, check out our full research report (it’s free for active Edge members).
Two Stocks to Watch:
Napco (NSSC)
Net Cash Position: $93.84 million (6.1% of Market Cap)
Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ: NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.
Why Should NSSC Be on Your Watchlist?
- Market share has increased this cycle as its 12.4% annual revenue growth over the last five years was exceptional
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
- Returns on capital are climbing as management makes more lucrative bets
Napco’s stock price of $43.26 implies a valuation ratio of 35.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Molina Healthcare (MOH)
Net Cash Position: $1.12 billion (11% of Market Cap)
Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.
Why Do We Like MOH?
- Impressive 19.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Scale advantages are evident in its $43.41 billion revenue base, which provides operating leverage when demand is strong
- Earnings per share have comfortably outperformed the peer group average over the last five years, increasing by 11.1% annually
Molina Healthcare is trading at $189.30 per share, or 10.5x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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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