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. That said, 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:
Okta (OKTA)
Net Cash Position: $2.18 billion (10.7% of Market Cap)
Named after the meteorological measurement for cloud cover, Okta (NASDAQ: OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.
Why Are We Wary of OKTA?
- Offerings struggled to generate meaningful interest as its average billings growth of 10.8% over the last year did not impress
- Estimated sales growth of 9.1% for the next 12 months implies demand will slow from its two-year trend
- Operating margin improvement of 5.1 percentage points over the last year demonstrates its ability to scale efficiently
Okta’s stock price of $116.47 implies a valuation ratio of 6.4x forward price-to-sales. Dive into our free research report to see why there are better opportunities than OKTA.
Ameris Bancorp (ABCB)
Net Cash Position: $315.8 million (5.4% of Market Cap)
Tracing its roots back to 1971 and expanding significantly through both organic growth and strategic acquisitions, Ameris Bancorp (NYSE: ABCB) is a financial holding company that provides a full range of banking services to retail and commercial customers across select markets in the southeastern United States.
Why Are We Cautious About ABCB?
- 7.9% annual net interest income growth over the last five years was slower than its banking peers
- Anticipated net interest income growth of 6.4% for the next year implies demand will be shaky
- Earnings per share lagged its peers over the last five years as they only grew by 3.1% annually
Ameris Bancorp is trading at $88.95 per share, or 1.3x forward P/B. Check out our free in-depth research report to learn more about why ABCB doesn’t pass our bar.
One Stock to Buy:
Micron (MU)
Net Cash Position: $4.45 billion (0.4% of Market Cap)
Founded in the basement of a Boise, Idaho dental office in 1978, Micron (NASDAQ: MU) is a leading provider of memory chips used in thousands of devices across mobile, data centers, industrial, consumer, and automotive markets.
Why Will MU Outperform?
- Market share has increased this cycle as its 78.2% annual revenue growth over the last two years was exceptional
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 38.3%, and it turbocharged its profits by achieving some fixed cost leverage
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 43% over the last five years outstripped its revenue performance
At $989.60 per share, Micron trades at 10.2x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
