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.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. That said, here is one company with a net cash position that balances growth with stability and two best left off your watchlist.
Two Stocks to Sell:
DocuSign (DOCU)
Net Cash Position: $717.5 million (5% of Market Cap)
Creating the digital equivalent of "sign on the dotted line" for over a billion users worldwide, DocuSign (NASDAQ: DOCU) provides an agreement management platform that enables businesses to electronically prepare, sign, and manage documents and contracts.
Why Does DOCU Worry Us?
- Customers were hesitant to make long-term commitments to its software as its 8.3% average ARR growth over the last year was sluggish
- Projected sales growth of 6.6% for the next 12 months suggests sluggish demand
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
DocuSign’s stock price of $71.99 implies a valuation ratio of 4.6x forward price-to-sales. If you’re considering DOCU for your portfolio, see our FREE research report to learn more.
National Bank Holdings (NBHC)
Net Cash Position: $1.78 billion (130% of Market Cap)
Operating under familiar local brands like Community Banks of Colorado, Bank Midwest, and Bank of Jackson Hole, National Bank Holdings (NYSE: NBHC) operates regional banks across Colorado, Kansas, Missouri, Wyoming, Texas, and other western states, offering commercial, business, and consumer banking services.
Why Are We Cautious About NBHC?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.5% annually over the last two years
- 17.3 basis point (100 basis points = 1 percentage point) decline in its net interest margin over the last two years reflects the firm’s willingness to accept lower profitability to defend its market position
- Anticipated 2 percentage point rise in its efficiency ratio suggests its expenses will increase as a percentage of revenue
National Bank Holdings is trading at $36.15 per share, or 1x forward P/B. Read our free research report to see why you should think twice about including NBHC in your portfolio.
One Stock to Buy:
Instacart (CART)
Net Cash Position: $1.56 billion (16.2% of Market Cap)
Powering more than one billion grocery orders since its founding, Instacart (NASDAQ: CART) is an online grocery shopping and delivery platform that partners with retailers to help customers shop from local stores through its app or website.
Why Should You Buy CART?
- Annual revenue growth of 19.5% over the last three years was superb and indicates its market share is rising
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 40.5% over the last three years outstripped its revenue performance
- Free cash flow margin increased by 23.9 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $36.71 per share, Instacart trades at 9.2x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our 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 Exlservice (+354% 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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