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. That said, here are three companies with net cash positions to avoid and some better alternatives instead.

Sprinklr (CXM)

Net Cash Position: $519.3 million (25% of Market Cap)

Initially focused only on social media management, Sprinklr (NYSE: CXM) is a leading provider of unified customer experience management software.

Why Should You Sell CXM?

1. Average billings growth of 4% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
2. Estimated sales growth of 3.4% for the next 12 months implies demand will slow from its three-year trend
3. Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 3.6 percentage points

Sprinklr is trading at $8.02 per share, or 2.5x forward price-to-sales. Check out our free in-depth research report to learn more about why CXM doesn’t pass our bar.

Magnachip (MX)

Net Cash Position: $101.8 million (74.5% of Market Cap)

With its technology found in common consumer electronics such as TVs and smartphones, Magnachip Semiconductor (NYSE: MX) is a provider of analog and mixed-signal semiconductors.

Why Is MX Risky?

1. Sales tumbled by 18.5% annually over the last five years, showing market trends are working against its favor during this cycle
2. Performance over the past five years shows each sale was less profitable as its earnings per share dropped by 20.8% annually, worse than its revenue
3. Cash burn has widened over the last five years, making us question whether it can reliably generate shareholder value

Magnachip’s stock price of $3.79 implies a valuation ratio of 0.7x forward price-to-sales. If you’re considering MX for your portfolio, see our FREE research report to learn more.

U.S. Bancorp (USB)

Net Cash Position: $116.7 billion (173% of Market Cap)

With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE: USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.

Why Is USB Not Exciting?

1. Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 6.7% over the last four years was below our standards for the bank sector
2. Weak unit economics are reflected in its net interest margin of 2.8%, one of the worst among bank companies
3. Sizable asset base leads to capital growth challenges as its 1.3% annual tangible book value per share increases over the last five years fell short of other bank companies

At $43.39 per share, U.S. Bancorp trades at 1.2x forward P/B. Check out our free in-depth research report to learn more about why USB doesn’t pass our bar.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our 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-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