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 are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
SiriusPoint (SPNT)
Net Cash Position: $108.9 million (5.1% of Market Cap)
Created through the 2021 merger of Third Point Reinsurance and Sirius International Insurance Group, SiriusPoint (NYSE: SPNT) is a global underwriter that provides multi-line insurance and reinsurance products and services to businesses, government entities, and other risk-bearing vehicles worldwide.
Why Should You Sell SPNT?
- Net premiums earned were flat over the last two years, indicating it’s failed to expand this cycle
- Costs have risen faster than its revenue over the last four years, causing its pre-tax profit margin to decline by 23 percentage points
- Underwhelming 6.1% return on equity reflects management’s difficulties in finding profitable growth opportunities
SiriusPoint is trading at $18.39 per share, or 0.8x trailing 12-month price-to-sales. To fully understand why you should be careful with SPNT, check out our full research report (it’s free).
Two Stocks to Watch:
Upwork (UPWK)
Net Cash Position: $253.3 million (16% of Market Cap)
Formed through the 2013 merger of Elance and oDesk, Upwork (NASDAQ: UPWK) is an online platform where businesses and independent professionals connect to get work done.
Why Could UPWK Be a Winner?
- 8.3% annual increases in its average revenue per customer over the last two years show its platform is resonating with power users
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 395% over the last three years outstripped its revenue performance
- Free cash flow margin grew by 27 percentage points over the last few years, giving the company more chips to play with
Upwork’s stock price of $12.07 implies a valuation ratio of 9.1x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
IonQ (IONQ)
Net Cash Position: $570.9 million (5.1% of Market Cap)
Founded by quantum physics pioneers from the University of Maryland and Duke University in 2015, IonQ (NYSE: IONQ) develops quantum computers that process information using trapped ions to solve complex computational problems beyond the capabilities of traditional computers.
Why Is IONQ a Good Business?
- Annual revenue growth of 78.8% over the last two years was superb and indicates its market share increased during this cycle
- Adjusted operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Negative free cash flow margin has improved over the last five years, showing the company is one step closer to financial self-sufficiency
At $40.01 per share, IonQ trades at 89.2x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2024, 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 Strong Momentum Stocks for this week. 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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