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. That said, here are two companies with net cash positions that can continue growing sustainably and one that may struggle.
One Stock to Sell:
RPC (RES)
Net Cash Position: $160 million (10.6% of Market Cap)
Operating primarily in the Permian Basin with 10 hydraulic fracturing fleets, RPC (NYSE: RES) provides specialized services and equipment like hydraulic fracturing, coiled tubing, and cementing to help oil and gas companies complete and maintain wells.
Why Do We Think Twice About RES?
- Revenue base of $1.63 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Gross margin of 28.3% reflects its high production costs and unfavorable asset base
- Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital
At $6.82 per share, RPC trades at 32.9x forward P/E. Check out our free in-depth research report to learn more about why RES doesn’t pass our bar.
Two Stocks to Watch:
Pinterest (PINS)
Net Cash Position: $2.25 billion (19.3% of Market Cap)
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Why Does PINS Stand Out?
- Monthly Active Users have grown by 11.4% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 38.2% annually, topping its revenue gains
- Strong free cash flow margin of 27.9% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
Pinterest is trading at $18.12 per share, or 7.3x forward EV/EBITDA. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Karat Packaging (KRT)
Net Cash Position: $3.04 million (0.5% of Market Cap)
Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions.
Why Could KRT Be a Winner?
- Solid 9.6% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Free cash flow margin increased by 7.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
Karat Packaging’s stock price of $27.29 implies a valuation ratio of 13.8x forward P/E. Is now the time to initiate a position? Find out in our full 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
