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. Keeping that in mind, here are two companies with net cash positions that can continue growing sustainably and one with hidden risks.
One Stock to Sell:
Barrett (BBSI)
Net Cash Position: $43.39 million (5.7% of Market Cap)
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ: BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Why Do We Think Twice About BBSI?
- Flat earnings per share over the last two years lagged its peers
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
- Eroding returns on capital suggest its historical profit centers are aging
At $31.31 per share, Barrett trades at 0.6x forward price-to-sales. Read our free research report to see why you should think twice about including BBSI in your portfolio.
Two Stocks to Buy:
Bel Fuse (BELFA)
Net Cash Position: $271.8 million (7.7% of Market Cap)
Founded by 26-year-old Elliot Bernstein during the electronics boom after WW2, Bel Fuse (NASDAQ: BELF.A) provides electronic systems and devices to the telecommunications, networking, transportation, and industrial sectors.
Why Is BELFA a Good Business?
- Impressive 15.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 27.1% outpaced its revenue gains
- Free cash flow margin grew by 8.7 percentage points over the last five years, giving the company more chips to play with
Bel Fuse’s stock price of $204.02 implies a valuation ratio of 25.8x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Axos Financial (AX)
Net Cash Position: $24.8 million (0.5% of Market Cap)
Originally founded as Bank of Internet USA in 1999 before rebranding in 2018, Axos Financial (NYSE: AX) is a diversified financial services company that provides digital banking, securities clearing, and investment advisory solutions to retail and business customers nationwide.
Why Do We Love AX?
- Market share has increased this cycle as its 18.3% annual net interest income growth over the last five years was exceptional
- Strong performance of its loan book is reflected in its best-in-class net interest margin of 4.8%
- Share repurchases over the last five years enabled its annual earnings per share growth of 18.8% to outpace its revenue gains
Axos Financial is trading at $87.60 per share, or 1.3x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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 Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
