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.
Not all businesses with cash are winners, and that’s why we built StockStory - to help you separate the good from the bad. Keeping that in mind, here is one company with a net cash position that can leverage its balance sheet to grow and two with hidden risks.
Two Stocks to Sell:
Boston Beer (SAM)
Net Cash Position: $234 million (13.1% of Market Cap)
Known for its flavorful beverages challenging the status quo, Boston Beer (NYSE: SAM) is a pioneer in craft brewing and a symbol of American innovation in the alcoholic beverage industry.
Why Should You Sell SAM?
- Products aren’t resonating with the market as its revenue declined by 2.2% annually over the last three years
- Inability to adjust its cost structure while its revenue declined over the last year led to a 9.9 percentage point drop in the company’s operating margin
- ROIC of -0.7% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up
Boston Beer’s stock price of $177.74 implies a valuation ratio of 18.7x forward P/E. To fully understand why you should be careful with SAM, check out our full research report (it’s free).
Ocular Therapeutix (OCUL)
Net Cash Position: $519.3 million (22.5% of Market Cap)
Pioneering a drug delivery platform that can eliminate the need for monthly eye injections, Ocular Therapeutix (NASDAQ: OCUL) develops sustained-release treatments for eye diseases using its proprietary ELUTYX bioresorbable hydrogel technology that gradually releases medication.
Why Do We Steer Clear of OCUL?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 7.7% annually over the last two years
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 7.5% annually
- 371.3 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
Ocular Therapeutix is trading at $10.62 per share, or 40.6x forward price-to-sales. If you’re considering OCUL for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Keysight (KEYS)
Net Cash Position: $35 million (0.1% of Market Cap)
Spun off from Hewlett-Packard in 2014, Keysight (NYSE: KEYS) offers electronic measurement products for use in various sectors.
Why Do We Love KEYS?
- Market share has increased this cycle as its 14.7% annual revenue growth over the last two years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 23.2% exceeded its revenue gains over the last two years
- Robust free cash flow margin of 21.4% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
At $322.63 per share, Keysight trades at 23.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
