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.
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 is one company with a net cash position that can continue growing sustainably and two that may struggle.
Two Stocks to Sell:
Paycom (PAYC)
Net Cash Position: $290.5 million (3.9% of Market Cap)
Pioneering the concept of employees doing their own payroll with its "Beti" technology, Paycom (NYSE: PAYC) provides cloud-based human capital management software that helps businesses manage the entire employment lifecycle from recruitment to retirement.
Why Are We Hesitant About PAYC?
- Products, pricing, or go-to-market strategy may need some adjustments as its 9.5% average billings growth over the last year was weak
- Estimated sales growth of 9.4% for the next 12 months is soft and implies weaker demand
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 4.6 percentage points
At $133.63 per share, Paycom trades at 3.5x forward price-to-sales. To fully understand why you should be careful with PAYC, check out our full research report (it’s free).
DNOW (DNOW)
Net Cash Position: $216 million (7.7% of Market Cap)
Spun off from National Oilwell Varco, DNOW (NYSE: DNOW) provides distribution and supply chain solutions for the energy and industrial end markets.
Why Does DNOW Give Us Pause?
- Muted 2.5% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- High input costs result in an inferior gross margin of 22.7% that must be offset through higher volumes
- Earnings per share were flat over the last two years and fell short of the peer group average
DNOW is trading at $14.92 per share, or 0.3x forward price-to-sales. Check out our free in-depth research report to learn more about why DNOW doesn’t pass our bar.
One Stock to Buy:
Sea (SE)
Net Cash Position: $5.66 billion (8.2% of Market Cap)
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Why Is SE a Top Pick?
- Paying Users have grown by 21.9% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Additional sales over the last three years increased its profitability as the 42.6% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 36.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Sea’s stock price of $116.88 implies a valuation ratio of 18.7x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Growth Stocks for this month. 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.
