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 balances growth with stability and two best left off your watchlist.
Two stocks to sell:
DocuSign (DOCU)
Net cash position: $594.6 million (3.9% of Market Cap)
Creating the digital equivalent of "sign on the dotted line" for over a billion users worldwide, DocuSign (NASDAQ: DOCU) provides an agreement management platform that enables businesses to electronically prepare, sign, and manage documents and contracts.
Why Do We Steer Clear of DOCU?
- ARR growth averaged a weak 5.5% over the last year, suggesting that competition is pulling some attention away from its software
- Anticipated sales growth of 8.1% for the next year implies demand will be shaky
- Long payback periods on sales and marketing expenses limit customer growth and signal the company operates in a highly competitive environment
DocuSign’s stock price of $80.05 implies a valuation ratio of 4.4x forward price-to-sales. If you’re considering DOCU for your portfolio, see our FREE research report to learn more.
Simpson (SSD)
Net cash position: $100.6 million (1.3% of Market Cap)
Aiming to build safer and stronger buildings, Simpson (NYSE: SSD) designs and manufactures structural connectors, anchors, and other construction products.
Why Does SSD Give Us Pause?
- Muted 4.8% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Estimated sales growth of 1.2% for the next 12 months implies demand will slow from its two-year trend
- Waning returns on capital imply its previous profit engines are losing steam
At $195.55 per share, Simpson trades at 20.3x forward P/E. To fully understand why you should be careful with SSD, check out our full research report (it’s free).
One stock to watch:
State Street (STT)
Net cash position: $89.79 billion (190% of Market Cap)
Dating back to 1792 when Boston's Long Wharf was the center of global shipping and trade, State Street (NYSE: STT) provides custody, investment management, and other financial services to institutional investors like pension funds, asset managers, and central banks worldwide.
Why Does STT Stand Out?
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 27.1% exceeded its revenue gains over the last two years
- ROE of 10.7% shows management can invest its resources competently
State Street is trading at $177.00 per share, or 11.6x forward P/E. Is now the time to initiate a position? See for yourself in our full 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
