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. That said, here are two companies with net cash positions that can leverage their balance sheets to grow and one with hidden risks.
One Stock to Sell:
Insteel (IIIN)
Net Cash Position: $21.38 million (3.5% of Market Cap)
Growing from a small wire manufacturer to one of the largest in the U.S., Insteel (NYSE:IIIN) provides steel wire reinforcing products for concrete.
Why Do We Think Twice About IIIN?
- Muted 4.9% annual revenue growth over the last five years shows its demand lagged behind its industrials peers
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 6.6% annually while its revenue grew
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Insteel’s stock price of $31.26 implies a valuation ratio of 14.9x forward P/E. Check out our free in-depth research report to learn more about why IIIN doesn’t pass our bar.
Two Stocks to Buy:
Plexus (PLXS)
Net Cash Position: $38.6 million (0.6% of Market Cap)
With over 20,000 team members across 26 global facilities, Plexus (NASDAQ:PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.
Why Will PLXS Beat the Market?
- Annual revenue growth of 8.1% over the last two years beat the sector average and underscores the unique value of its offerings
- Projected revenue growth of 20.6% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Share buybacks catapulted its annual earnings per share growth to 30.5%, which outperformed its revenue gains over the last two years
At $245.98 per share, Plexus trades at 24.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Paymentus (PAY)
Net Cash Position: $368.9 million (8.1% of Market Cap)
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE:PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
What Makes PAY Stand Out?
- Annual revenue growth of 39.5% over the last two years was superb and indicates its market share increased during this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 47.8% outpaced its revenue gains
Paymentus is trading at $36.19 per share, or 37x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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 Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.