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.
Just because a business has cash doesn’t mean it’s a good investment. Luckily, StockStory is here to help you separate the winners from the losers. Keeping that in mind, here are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
10x Genomics (TXG)
Net Cash Position: $360.5 million (23% of Market Cap)
Founded in 2012 by scientists seeking to overcome limitations in traditional biological research methods, 10x Genomics (NASDAQ:TXG) develops instruments, consumables, and software that enable researchers to analyze biological systems at single-cell resolution and spatial context.
Why Is TXG Not Exciting?
- Annual revenue growth of 6.5% over the last two years was below our standards for the healthcare sector
- Negative free cash flow raises questions about the return timeline for its investments
- Push for growth has led to negative returns on capital, signaling value destruction
10x Genomics is trading at $12.80 per share, or 2.7x forward price-to-sales. Read our free research report to see why you should think twice about including TXG in your portfolio.
Two Stocks to Buy:
Vital Farms (VITL)
Net Cash Position: $90.64 million (4.3% of Market Cap)
With an emphasis on ethically produced products, Vital Farms (NASDAQ:VITL) specializes in pasture-raised eggs and butter.
Why Is VITL a Top Pick?
- Products are selling at a rapid clip as its unit sales averaged an outstanding 20.1% growth rate over the past two years
- Demand for the next 12 months is expected to accelerate above its three-year trend as Wall Street forecasts robust revenue growth of 31.3%
- Earnings per share have massively outperformed its peers over the last three years, increasing by 109% annually
Vital Farms’s stock price of $46.76 implies a valuation ratio of 33.4x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
ServisFirst Bancshares (SFBS)
Net Cash Position: $47.02 million (1% of Market Cap)
Founded in 2005 with a focus on serving underserved mid-sized businesses, ServisFirst Bancshares (NYSE:SFBS) is a bank holding company that provides commercial banking services to businesses and professionals through its subsidiary ServisFirst Bank.
Why Are We Backing SFBS?
- Unique value proposition resonates with borrowers, as seen in its above-market 9.7% annual net interest income growth over the last five years
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 10.6% outpaced its revenue gains
- Annual tangible book value per share growth of 13.4% over the last five years was superb and indicates its capital strength increased during this cycle
At $84.23 per share, ServisFirst Bancshares trades at 2.5x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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