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.
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. Keeping that in mind, 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:
Asana (ASAN)
Net Cash Position: $214.7 million (12.3% of Market Cap)
Born from the founders' frustration with the inefficiencies of email-based collaboration at Facebook, Asana (NYSE: ASAN) provides a work management platform that helps organizations track projects, set goals, and manage workflows in a centralized digital workspace.
Why Do We Think ASAN Will Underperform?
- Underwhelming ARR growth of 9.6% over the last year suggests the company faced challenges in acquiring and retaining long-term customers
- Customers have churned over the last year due to the commoditized nature of its software, as reflected in its 96% net revenue retention rate
- Software platform has intricate integration requirements for its enterprise clients, triggering long sales cycles that limit new customer additions
Asana is trading at $7.45 per share, or 2x forward price-to-sales. Check out our free in-depth research report to learn more about why ASAN doesn’t pass our bar.
Robert Half (RHI)
Net Cash Position: $26.41 million (0.8% of Market Cap)
With roots dating back to 1948 as the first specialized recruiting firm for accounting and finance professionals, Robert Half (NYSE: RHI) provides specialized talent solutions and business consulting services, connecting skilled professionals with companies across various fields.
Why Do We Avoid RHI?
- Sales tumbled by 6.9% annually over the last two years, showing market trends are working against it during this cycle
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 14.8% annually
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $31.35 per share, Robert Half trades at 20x forward P/E. Read our free research report to see why you should think twice about including RHI in your portfolio.
One Stock to Buy:
Sterling (STRL)
Net Cash Position: $192.1 million (0.8% of Market Cap)
Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ: STRL) provides civil infrastructure construction.
Why Are We Bullish on STRL?
- Annual revenue growth of 19.8% over the last two years was superb and indicates its market share increased during this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
- Rising returns on capital show management is finding more attractive investment opportunities
Sterling’s stock price of $764 implies a valuation ratio of 43.9x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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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.
