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.
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 with hidden risks.
Two Stocks to Sell:
F5 (FFIV)
Net Cash Position: $1.39 billion (5.5% of Market Cap)
Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ: FFIV) provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.
Why Does FFIV Fall Short?
- Average billings growth of 11.3% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 7.6% for the next 12 months implies demand will slow from its two-year trend
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
At $446.21 per share, F5 trades at 7.4x forward price-to-sales. To fully understand why you should be careful with FFIV, check out our full research report (it’s free).
Centene (CNC)
Net Cash Position: $7.97 billion (26.1% of Market Cap)
Serving nearly 1 in 15 Americans through its government healthcare programs, Centene (NYSE: CNC) is a healthcare company that manages government-sponsored health insurance programs like Medicaid and Medicare for low-income and complex-needs populations.
Why Is CNC Not Exciting?
- Weak customer trends over the past two years suggest it may need to improve its products, pricing, or go-to-market strategy
- Push for growth has led to negative returns on capital, signaling value destruction, and its falling returns suggest its earlier profit pools are drying up
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Centene’s stock price of $61.71 implies a valuation ratio of 13.3x forward P/E. If you’re considering CNC for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Brady (BRC)
Net Cash Position: $103.6 million (2.7% of Market Cap)
Founded in 1914 and evolving through more than a century of industrial innovation, Brady (NYSE: BRC) manufactures and supplies identification solutions and workplace safety products that help companies identify and protect their premises, products, and people.
Why Will BRC Beat the Market?
- Annual revenue growth of 11.3% over the last two years was superb and indicates its market share increased during this cycle
- Projected revenue growth of 74% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Free cash flow margin jumped by 5.8 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
Brady is trading at $82.63 per share, or 12.8x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
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.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.
