A cash-heavy balance sheet is often a sign of strength, but not always. Some companies avoid debt because they have weak business models, limited expansion opportunities, or inconsistent cash flow.
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 is one company with a net cash position that can continue growing sustainably and two with hidden risks.
Two Stocks to Sell:
Okta (OKTA)
Net Cash Position: $2.25 billion (6.3% 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 Does OKTA Give Us Pause?
- Customers were hesitant to make long-term commitments to its software as its 11.8% average ARR growth over the last year was sluggish
- Estimated sales growth of 9.9% for the next 12 months implies demand will slow from its two-year trend
- Operating margin expanded by 4.9 percentage points over the last year as it scaled and became more efficient
At $205.67 per share, Okta trades at 10.4x forward price-to-sales. If you’re considering OKTA for your portfolio, see our FREE research report to learn more.
Richardson Electronics (RELL)
Net Cash Position: $30.39 million (12% 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 Are We Hesitant About RELL?
- Annual revenue growth of 5.3% over the last five years was below our standards for the industrials sector
- Investment activity picked up over the last five years, pressuring its weak free cash flow margin of -0.9%
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Richardson Electronics is trading at $16.90 per share, or 34.1x forward P/E. Dive into our free research report to see why there are better opportunities than RELL.
One Stock to Watch:
Redwire (RDW)
Net Cash Position: $466.8 million (16.6% of Market Cap)
Based in Jacksonville, Florida, Redwire (NYSE: RDW) is a provider of systems and components used in space infrastructure.
Why Are We Positive on RDW?
- Annual revenue growth of 20.8% over the past two years was outstanding, reflecting market share gains this cycle
- Market share will likely rise over the next 12 months as its expected revenue growth of 20.6% is robust
- Returns on capital are increasing as management’s prior bets are starting to bear fruit
Redwire’s stock price of $11.23 implies a valuation ratio of 5x forward price-to-sales. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
