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.
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:
Manhattan Associates (MANH)
Net Cash Position: $170.4 million (2.1% of Market Cap)
Built on a "versionless" cloud architecture that delivers quarterly updates to all customers, Manhattan Associates (NASDAQ: MANH) develops cloud-based software that helps retailers, wholesalers, and manufacturers manage their supply chains, inventory, and omnichannel operations.
Why Are We Hesitant About MANH?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 5.8% underwhelmed
- Gross margin of 56% is way below its competitors, leaving less money to invest in areas like marketing and R&D
- Static operating margin over the last year shows it couldn’t become more efficient
Manhattan Associates’s stock price of $151.04 implies a valuation ratio of 7.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than MANH.
TowneBank (TOWN)
Net Cash Position: $926.7 million (28.9% of Market Cap)
Founded in 1998 with a commitment to community-centered banking in the Hampton Roads region, TowneBank (NASDAQ: TOWN) is a community-focused financial institution providing banking, lending, and wealth management services to individuals and businesses in Virginia and North Carolina.
Why Does TOWN Worry Us?
- 5.2% annual revenue growth over the last five years was slower than its banking peers
- Day-to-day expenses have swelled relative to revenue over the last five years as its efficiency ratio increased by 8.5 percentage points
- 4% annual tangible book value per share growth over the last two years was slower than its banking peers
TowneBank is trading at $36.44 per share, or 1.1x forward P/B. Check out our free in-depth research report to learn more about why TOWN doesn’t pass our bar.
One Stock to Buy:
Clover Health (CLOV)
Net Cash Position: $203.5 million (7.9% of Market Cap)
Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.
Why Is CLOV a Good Business?
- Impressive 31.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Adjusted operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Free cash flow flipped to positive over the last five years, indicating the company has passed a significant test
At $5.28 per share, Clover Health trades at 59.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
