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. Keeping that in mind, here is one company with a net cash position that can leverage its balance sheet to grow and two that may struggle.
Two Stocks to Sell:
Asana (ASAN)
Net Cash Position: $225.5 million (16.5% of Market Cap)
Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE: ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.
Why Is ASAN Risky?
- Average billings growth of 9.4% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 95.7% net revenue retention rate
- Drawn-out sales process reflects its software’s integration hurdles with enterprise clients, restraining customer growth potential
Asana’s stock price of $5.74 implies a valuation ratio of 1.7x forward price-to-sales. Check out our free in-depth research report to learn more about why ASAN doesn’t pass our bar.
Markel Group (MKL)
Net Cash Position: $159.1 million (0.6% of Market Cap)
Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE: MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.
Why Are We Cautious About MKL?
- Outsized scale creates growth headwinds as its 2.5% annualized net premiums earned increases over the last two years underperformed other financial institutions
- Projected sales decline of 1.5% for the next 12 months points to a tough demand environment ahead
- Estimated book value per share growth of 8.8% for the next 12 months implies profitability will slow from its two-year trend
At $1,957 per share, Markel Group trades at 1.2x forward P/B. If you’re considering MKL for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Freshworks (FRSH)
Net Cash Position: $810.5 million (35.9% of Market Cap)
Starting as a customer service solution before expanding into a comprehensive software suite, Freshworks (NASDAQ: FRSH) provides AI-powered software-as-a-service solutions that help companies manage customer service, IT support, sales, and marketing functions.
Why Are We Positive On FRSH?
- ARR trends over the last year show it’s maintaining a steady flow of long-term contracts that contribute positively to its revenue predictability
- Software is difficult to replicate at scale and results in a stellar gross margin of 85%
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Freshworks is trading at $7.97 per share, or 2.4x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive 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 meeting near-term momentum — both boxes checked at the same time.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
