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. That said, here are two companies with net cash positions that can continue growing sustainably and one best left off your watchlist.
One Stock to Sell:
Omnicell (OMCL)
Net Cash Position: $59.7 million (3.1% of Market Cap)
Driven by the vision of an "Autonomous Pharmacy" with zero medication errors, Omnicell (NASDAQ: OMCL) provides medication management automation and adherence tools that help healthcare systems and pharmacies reduce errors and improve efficiency.
Why Do We Steer Clear of OMCL?
- 5.4% annual revenue growth over the last two years was slower than its healthcare peers
- Earnings per share fell by 6.8% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam
Omnicell is trading at $41.95 per share, or 24.3x forward P/E. Check out our free in-depth research report to learn more about why OMCL doesn’t pass our bar.
Two Stocks to Buy:
Lam Research (LRCX)
Net Cash Position: $1.02 billion (0.3% of Market Cap)
Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ: LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.
Why Is LRCX a Top Pick?
- Annual revenue growth of 23.4% over the last two years was superb and indicates its market share increased during this cycle
- Excellent operating margin of 32.8% highlights the efficiency of its business model, and its profits increased over the last five years as it scaled
- ROIC punches in at 64.2%, illustrating management’s expertise in identifying profitable investments
Lam Research’s stock price of $322.00 implies a valuation ratio of 40.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
MercadoLibre (MELI)
Net Cash Position: $4.77 billion (5.2% of Market Cap)
Originally started as an online auction platform, MercadoLibre (NASDAQ: MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Will MELI Outperform?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 77.7% annual growth in its average revenue per user
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
At $1,816 per share, MercadoLibre trades at 20.7x forward EV/EBITDA. 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.
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
