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. That said, here are two companies with net cash positions that can continue growing sustainably and one that may struggle.
One Stock to Sell:
SoundHound AI (SOUN)
Net Cash Position: $264.1 million (8% of Market Cap)
Born from the idea that machines should understand human speech as naturally as people do, SoundHound AI (NASDAQ: SOUN) develops voice recognition and conversational intelligence technology that enables businesses to integrate voice assistants into their products and services.
Why Are We Cautious About SOUN?
- Bad unit economics and steep infrastructure costs are reflected in its gross margin of 39.7%, one of the worst among software companies
- Extended payback periods on sales investments suggest the company’s platform isn’t resonating enough to drive efficient sales conversions
- Negative free cash flow raises questions about the return timeline for its investments
SoundHound AI is trading at $7.85 per share, or 15.3x forward price-to-sales. To fully understand why you should be careful with SOUN, check out our full research report (it’s free).
Two Stocks to Watch:
Monolithic Power Systems (MPWR)
Net Cash Position: $1.26 billion (2.1% of Market Cap)
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Do We Love MPWR?
- Annual revenue growth of 27% over the last five years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 28.7% over the last five years outstripped its revenue performance
- Free cash flow margin expanded by 8 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $1,204 per share, Monolithic Power Systems trades at 54.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Crane (CR)
Net Cash Position: $581.6 million (5% of Market Cap)
Based in Connecticut, Crane (NYSE: CR) is a diversified manufacturer of engineered industrial products, including fluid handling, and aerospace technologies.
Why Are We Positive On CR?
- Market share is on track to rise over the next 12 months as its 24.5% projected revenue growth implies demand will accelerate from its two-year trend
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 18.9% outpaced its revenue gains
- Improving returns on capital reflect management’s ability to monetize investments
Crane’s stock price of $203.25 implies a valuation ratio of 30.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
