Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. Keeping that in mind, here are two companies with net cash positions that can continue growing sustainably and one best left off your watchlist.
One Stock to Sell:
Benchmark (BHE)
Net Cash Position: -$3.35 million (-0.2% of Market Cap)
Operating as a critical behind-the-scenes partner for complex technology products since 1979, Benchmark Electronics (NYSE: BHE) provides advanced manufacturing, engineering, and technology solutions for original equipment manufacturers across aerospace, medical, industrial, and technology sectors.
Why Do We Think Twice About BHE?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 3.2% annually over the last two years
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 0.7% for the last five years
- Underwhelming 7.2% return on capital reflects management’s difficulties in finding profitable growth opportunities
Benchmark is trading at $58.31 per share, or 22.9x forward P/E. To fully understand why you should be careful with BHE, check out our full research report (it’s free).
Two Stocks to Watch:
Zscaler (ZS)
Net Cash Position: $1.65 billion (7% of Market Cap)
Pioneering the "zero trust" approach that has fundamentally changed enterprise network security, Zscaler (NASDAQ: ZS) provides a cloud-based security platform that connects users, devices, and applications securely without traditional network-based security hardware.
Why Will ZS Outperform?
- Billings growth has averaged 24.3% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Estimated revenue growth of 20.9% for the next 12 months implies its momentum over the last two years will continue
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $148.26 per share, Zscaler trades at 6.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
Capital One (COF)
Net Cash Position: $20.98 billion (17.2% of Market Cap)
Starting as a credit card company in 1988 before expanding into a full-service bank, Capital One (NYSE: COF) is a financial services company that offers credit cards, auto loans, banking services, and commercial lending to consumers and businesses.
Why Do We Like COF?
- Annual revenue growth of 20.8% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 27.6% annually, topping its revenue gains
- ROE of 10.5% shows management can invest its resources competently
Capital One’s stock price of $194.51 implies a valuation ratio of 9.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
