A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.
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 are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
Richardson Electronics (RELL)
Net Cash Position: $27.92 million (12.5% 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 Should You Sell RELL?
- 1.5% annual revenue growth over the last two years was slower than its industrials peers
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Richardson Electronics’s stock price of $15.16 implies a valuation ratio of 40.7x forward P/E. Check out our free in-depth research report to learn more about why RELL doesn’t pass our bar.
Two Stocks to Watch:
Airbnb (ABNB)
Net Cash Position: $9.47 billion (11.3% of Market Cap)
Founded by Brian Chesky and Joe Gebbia in their San Francisco apartment, Airbnb (NASDAQ: ABNB) is the world’s largest online marketplace for lodging, primarily homestays.
Why Are We Backing ABNB?
- Nights and Experiences Booked have grown by 9.1% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Excellent EBITDA margin of 35.3% highlights the efficiency of its business model, and its rise over the last few years was fueled by some leverage on its fixed costs
- Strong free cash flow margin of 37.2% enables it to reinvest or return capital consistently
At $142.10 per share, Airbnb trades at 15.1x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Northern Trust (NTRS)
Net Cash Position: $14.12 billion (47.6% of Market Cap)
Founded in 1889 during Chicago's post-Great Fire rebuilding boom, Northern Trust (NASDAQ: NTRS) provides wealth management, asset servicing, and banking solutions to corporations, institutions, families, and high-net-worth individuals globally.
Why Does NTRS Stand Out?
- Share repurchases over the last two years enabled its annual earnings per share growth of 32.1% to outpace its revenue gains
- Industry-leading 13% return on equity demonstrates management’s skill in finding high-return investments
Northern Trust is trading at $160.41 per share, or 14.8x 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
