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.
Just because a business has cash doesn’t mean it’s a good investment. Luckily, StockStory is here to help you separate the winners from the losers. Keeping that in mind, here is one company with a net cash position that can continue growing sustainably and two that may struggle.
Two Stocks to Sell:
Clarus (CLAR)
Net Cash Position: $27.53 million (21.2% of Market Cap)
Initially a financial services business, Clarus (NASDAQ:CLAR) designs, manufactures, and distributes outdoor equipment and lifestyle products.
Why Do We Pass on CLAR?
- Sales trends were unexciting over the last five years as its 4.2% annual growth was below the typical consumer discretionary company
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Clarus is trading at $3.38 per share, or 23x forward P/E. If you’re considering CLAR for your portfolio, see our FREE research report to learn more.
Crane (CR)
Net Cash Position: $374.7 million (3.4% of Market Cap)
Based in Connecticut, Crane (NYSE:CR) is a diversified manufacturer of engineered industrial products, including fluid handling, and aerospace technologies.
Why Does CR Worry Us?
- Annual sales declines of 5.2% for the past five years show its products and services struggled to connect with the market during this cycle
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Performance over the past two years was negatively impacted by new share issuances as its earnings per share grew slower than its revenue
At $191.75 per share, Crane trades at 31x forward P/E. Read our free research report to see why you should think twice about including CR in your portfolio.
One Stock to Watch:
NetApp (NTAP)
Net Cash Position: $486 million (2.1% of Market Cap)
Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ:NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.
Why Are We Fans of NTAP?
- Billings growth has averaged 7.2% over the past two years, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Adjusted operating margin expanded by 5.9 percentage points over the last five years as it scaled and became more efficient
- Strong free cash flow margin of 19.7% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business
NetApp’s stock price of $115.66 implies a valuation ratio of 14.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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