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:
Sprinklr (CXM)
Net Cash Position: $425.8 million (24% of Market Cap)
With a proprietary AI engine processing 450 million data points daily across 30+ digital channels, Sprinklr (NYSE:CXM) provides cloud-based software that helps large enterprises manage customer experiences across social, messaging, chat, and voice channels.
Why Do We Think CXM Will Underperform?
- Products, pricing, or go-to-market strategy may need some adjustments as its 3.1% average billings growth over the last year was weak
- Estimated sales growth of 4.2% for the next 12 months implies demand will slow from its two-year trend
- Operating margin failed to increase over the last year, indicating the company couldn’t optimize its expenses
At $7.19 per share, Sprinklr trades at 2.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CXM.
Republic Bancorp (RBCAA)
Net Cash Position: $121.1 million (9.3% of Market Cap)
With roots dating back to 1974 and operating across multiple states including Kentucky, Indiana, Florida, Ohio, and Tennessee, Republic Bancorp (NASDAQGS:RBCA.A) is a Kentucky-based financial holding company that operates a bank offering traditional banking, mortgage services, and specialized financial products.
Why Does RBCAA Give Us Pause?
- Projected net interest income decline of 1.7% for the next 12 months points to a tough demand environment ahead
Republic Bancorp is trading at $66.53 per share, or 1.2x forward P/B. Check out our free in-depth research report to learn more about why RBCAA doesn’t pass our bar.
One Stock to Buy:
Badger Meter (BMI)
Net Cash Position: $201.7 million (3.9% of Market Cap)
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.
Why Are We Backing BMI?
- Impressive 16.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 27.3% outpaced its revenue gains
- Robust free cash flow margin of 15.5% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
Badger Meter’s stock price of $175.86 implies a valuation ratio of 33.1x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our 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 244% over the last five years (as of June 30, 2025).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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