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.

Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. That said, here are two companies with net cash positions that balance growth with stability and one with hidden risks.

One Stock to Sell:

Azenta (AZTA)

Net Cash Position: $409.1 million (33.1% of Market Cap)

Serving as the guardian of some of medicine's most valuable materials, Azenta (NASDAQ: AZTA) provides biological sample management, storage, and genomic services that help pharmaceutical and biotechnology companies preserve and analyze critical research materials.

Why Do We Avoid AZTA?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 6.5% annually over the last five years
2. Earnings per share have dipped by 9% annually over the past five years, which is concerning because stock prices follow EPS over the long term
3. Negative free cash flow raises questions about the return timeline for its investments

Azenta’s stock price of $26.83 implies a valuation ratio of 52.4x forward price-to-earnings. To fully understand why you should be careful with AZTA, check out our full research report (it’s free).

Two Stocks to Watch:

Graham Corporation (GHM)

Net Cash Position: $22.05 million (6.5% of Market Cap)

Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.

Why Is GHM a Good Business?

1. Impressive 17% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Earnings per share have massively outperformed its peers over the last two years, increasing by 298% annually
3. Free cash flow margin jumped by 5.6 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $30.50 per share, Graham Corporation trades at 25.8x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

WEBTOON (WBTN)

Net Cash Position: $555.2 million (47% of Market Cap)

Pioneering a vertical-scrolling format optimized for mobile devices, WEBTOON Entertainment (NASDAQ: WBTN) operates a global platform where creators publish serialized web-comics and web-novels that users can read in bite-sized episodes.

Why Are We Positive On WBTN?

1. Market share has increased this cycle as its 11.8% annual revenue growth over the last two years was exceptional
2. Estimated revenue growth of 8% for the next 12 months implies its momentum over the last two years will continue
3. Earnings growth has massively outpaced its peers over the last one years as its EPS has compounded at 107% annually

WEBTOON is trading at $9.10 per share, or 9.5x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.