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. That said, here is one company with a net cash position that balances growth with stability and two that may struggle.

Two Stocks to Sell:

Stifel (SF)

Net Cash Position: $394.7 million (3.4% of Market Cap)

Tracing its roots back to 1890 when the firm was established in St. Louis, Stifel Financial (NYSE: SF) is a financial services firm that provides wealth management, investment banking, and institutional brokerage services to individuals, corporations, and institutions.

Why Does SF Worry Us?

1. Muted 7.5% annual revenue growth over the last five years shows its demand lagged behind its financials peers
2. Annual earnings per share growth of 4.1% underperformed its revenue over the last two years, showing its incremental sales were less profitable
3. 4% annual book value per share growth over the last two years was slower than its financials peers

Stifel is trading at $115 per share, or 13.7x forward P/E. To fully understand why you should be careful with SF, check out our full research report (it’s free).

Cincinnati Financial (CINF)

Net Cash Position: $86 million (0.4% of Market Cap)

Founded in 1950 by independent insurance agents seeking stable market options for their clients, Cincinnati Financial (NASDAQ: CINF) provides property casualty insurance, life insurance, and related financial services through independent agencies across 46 states.

Why Does CINF Fall Short?

1. Sizable revenue base leads to growth challenges as its 6.8% annual revenue increases over the last five years fell short of other insurance companies
2. Day-to-day expenses have swelled relative to revenue over the last four years as its combined ratio increased by 8.4 percentage points
3. Estimated book value per share growth of 2.8% for the next 12 months implies profitability will slow from its two-year trend

Cincinnati Financial’s stock price of $154.44 implies a valuation ratio of 1.7x forward P/B. Dive into our free research report to see why there are better opportunities than CINF.

One Stock to Buy:

GitLab (GTLB)

Net Cash Position: $1.17 billion (14.3% of Market Cap)

With its all-remote workforce pioneering a new approach to software development, GitLab (NASDAQ: GTLB) provides a single-application DevSecOps platform that helps development, operations, and security teams collaborate to build, secure, and deploy software faster.

Why Are We Backing GTLB?

1. ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
2. Prominent and differentiated software results in a best-in-class gross margin of 88.5%
3. Strong free cash flow margin of 25.9% enables it to reinvest or return capital consistently

At $48.82 per share, GitLab trades at 7.9x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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 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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