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.
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 are three companies with net cash positions that don’t make the cut and some better choices instead.
LiveRamp (RAMP)
Net Cash Position: $376.9 million (23.6% of Market Cap)
Serving as the digital middleman in an increasingly privacy-conscious world, LiveRamp (NYSE: RAMP) provides technology that helps companies securely share and connect their customer data with trusted partners while maintaining privacy compliance.
Why Do We Think Twice About RAMP?
- Average ARR growth of 7.4% over the last year has disappointed, suggesting it’s had a hard time winning long-term deals and renewals
- Estimated sales growth of 9% for the next 12 months implies demand will slow from its two-year trend
- Operating margin improvement of 3.6 percentage points over the last year demonstrates its ability to scale efficiently
At $25.08 per share, LiveRamp trades at 2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than RAMP.
Alarm.com (ALRM)
Net Cash Position: $498.4 million (19.7% of Market Cap)
Processing over 325 billion data points annually from more than 150 million connected devices, Alarm.com (NASDAQ: ALRM) provides cloud-based platforms that enable residential and commercial property owners to remotely monitor and control their security, video, energy, and other connected devices.
Why Is ALRM Risky?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 7% underwhelmed
- Estimated sales growth of 3.7% for the next 12 months implies demand will slow from its two-year trend
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Alarm.com is trading at $50.73 per share, or 2.9x forward price-to-sales. Check out our free in-depth research report to learn more about why ALRM doesn’t pass our bar.
Richardson Electronics (RELL)
Net Cash Position: $31.4 million (20% of Market Cap)
Founded in 1947, Richardson Electronics (NASDAQ: RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.
Why Do We Think RELL Will Underperform?
- Backlog has dropped by 3.4% on average over the past two years, suggesting it’s losing orders as competition picks up
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Richardson Electronics’s stock price of $10.79 implies a valuation ratio of 33.8x forward P/E. To fully understand why you should be careful with RELL, check out our full research report (it’s free).
Stocks We Like More
Check out the high-quality names we’ve flagged in our Top 6 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.
