1 Cash-Heavy Stock Worth Your Attention and 2 We Find Risky

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 balances growth with stability and two that may struggle.

Two Stocks to Sell:

Okta (OKTA)

Net Cash Position: $1.92 billion (11.8% of Market Cap)

Named after the meteorological measurement for cloud cover, Okta (NASDAQ:OKTA) provides cloud-based identity management solutions that help organizations securely connect their employees, partners, and customers to the right applications and services.

Why Does OKTA Give Us Pause?

1. Sales trends were unexciting over the last three years as its 20% annual growth was below the typical software company
2. Estimated sales growth of 8.7% for the next 12 months implies demand will slow from its three-year trend
3. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 3.8 percentage points

Okta’s stock price of $92.08 implies a valuation ratio of 5.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than OKTA.

Karat Packaging (KRT)

Net Cash Position: $56.99 million (11.5% of Market Cap)

Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions.

Why Are We Cautious About KRT?

1. Annual revenue growth of 4.2% over the last two years was below our standards for the industrials sector
2. Revenue growth over the past two years was nullified by the company’s new share issuances as its earnings per share fell by 2.9% annually
3. Low free cash flow margin of 5.9% for the last five years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders

At $24.76 per share, Karat Packaging trades at 16.7x forward P/E. If you’re considering KRT for your portfolio, see our FREE research report to learn more.

One Stock to Buy:

American Superconductor (AMSC)

Net Cash Position: $209.7 million (8.5% of Market Cap)

Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.

Why Will AMSC Outperform?

1. Impressive 49.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
2. Free cash flow margin is now positive, showing the company is at an important crossroads
3. Historical investments are beginning to pay off as its returns on capital are growing

American Superconductor is trading at $55.01 per share, or 96x 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

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.