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.
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 with hidden risks.
Two Stocks to Sell:
Proto Labs (PRLB)
Net Cash Position: $125.4 million (8.4% of Market Cap)
Pioneering the concept of online quoting and manufacturing for custom prototypes and low-volume production parts, Proto Labs (NYSE: PRLB) offers injection molding, 3D printing, and sheet metal fabrication for manufacturers in various industries.
Why Do We Think PRLB Will Underperform?
- 2.9% annual revenue growth over the last two years was slower than its industrials peers
- Earnings per share have contracted by 7% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Underwhelming -1% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $62.89 per share, Proto Labs trades at 35.1x forward P/E. Check out our free in-depth research report to learn more about why PRLB doesn’t pass our bar.
Clover Health (CLOV)
Net Cash Position: $120.3 million (10.6% of Market Cap)
Founded in 2014 to improve healthcare for America's seniors through technology, Clover Health (NASDAQ: CLOV) provides Medicare Advantage plans for seniors with a focus on affordable care and uses its proprietary Clover Assistant software to help physicians manage patient care.
Why Are We Wary of CLOV?
- Revenue base of $1.92 billion indicates it’s still subscale compared to its larger peers (though this creates opportunities to expand into untapped markets)
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Clover Health is trading at $2.18 per share, or 36.1x forward P/E. Dive into our free research report to see why there are better opportunities than CLOV.
One Stock to Buy:
Nubank (NU)
Net Cash Position: $8.12 billion (11.1% of Market Cap)
With well over one hundred million customers across Brazil, Mexico, and Colombia through its viral member-get-member referral program, Nubank (NYSE: NU) is a digital banking platform that offers financial services including spending, saving, investing, borrowing, and protection products to millions of customers across Latin America.
Why Will NU Beat the Market?
- Annual revenue growth of 39.1% over the past two years was outstanding, reflecting market share gains this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 72.8% over the last two years outstripped its revenue performance
Nubank’s stock price of $15.07 implies a valuation ratio of 17.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
