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 can leverage its balance sheet to grow and two best left off your watchlist.
Two Stocks to Sell:
Columbia Sportswear (COLM)
Net Cash Position: $97.84 million (3.3% of Market Cap)
Originally founded as a hat store in 1938, Columbia Sportswear (NASDAQ: COLM) is a manufacturer of outerwear, sportswear, and footwear designed for outdoor enthusiasts.
Why Do We Pass on COLM?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 7.1 percentage points
- Diminishing returns on capital suggest its earlier profit pools are drying up
Columbia Sportswear’s stock price of $54.01 implies a valuation ratio of 20x forward P/E. To fully understand why you should be careful with COLM, check out our full research report (it’s free for active Edge members).
STAAR Surgical (STAA)
Net Cash Position: $126.6 million (9.8% of Market Cap)
With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ: STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.
Why Do We Think STAA Will Underperform?
- Constant currency growth was below our standards over the past two years, suggesting it might need to invest in product improvements to get back on track
- Free cash flow margin shrank by 35.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- Waning returns on capital imply its previous profit engines are losing steam
At $26.20 per share, STAAR Surgical trades at 61x forward P/E. Dive into our free research report to see why there are better opportunities than STAA.
One Stock to Buy:
CrowdStrike (CRWD)
Net Cash Position: $4.16 billion (3.1% of Market Cap)
Known for detecting the massive SolarWinds hack in 2020 that compromised numerous government agencies, CrowdStrike (NASDAQ: CRWD) provides cloud-based cybersecurity solutions that protect endpoints, cloud workloads, identity, and data through its Falcon platform.
Why Are We Bullish on CRWD?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 25% over the last year
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
CrowdStrike is trading at $534.50 per share, or 25x forward price-to-sales. Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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