2 Cash-Heavy Stocks with Competitive Advantages and 1 That Underwhelm

A surplus of cash can mean financial stability, but it can also indicate a reluctance (or inability) to invest in growth. Some of these companies also face challenges like stagnating revenue, declining market share, or limited scalability.

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. That said, here are two companies with net cash positions that can continue growing sustainably and one with hidden risks.

One Stock to Sell:

The Honest Company (HNST)

Net Cash Position: $64.97 million (22.5% of Market Cap)

Co-founded by actress Jessica Alba, The Honest Company (NASDAQ:HNST) sells diapers and wipes, skin care products, and household cleaning products.

Why Do We Pass on HNST?

1. Modest revenue base of $383.1 million gives it less fixed cost leverage and fewer distribution channels than larger companies
2. Capital intensity has ramped up over the last year as its free cash flow margin decreased by 13.2 percentage points
3. Negative returns on capital show that some of its growth strategies have backfired

The Honest Company’s stock price of $2.59 implies a valuation ratio of 22.3x forward P/E. Dive into our free research report to see why there are better opportunities than HNST.

Two Stocks to Watch:

Nova (NVMI)

Net Cash Position: $204.3 million (1.7% of Market Cap)

Headquartered in Israel, Nova (NASDAQ:NVMI) is a provider of quality control systems used in semiconductor manufacturing.

Why Do We Love NVMI?

1. Market share has increased this cycle as its 26.3% annual revenue growth over the last two years was exceptional
2. Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 33.1% annually
3. Strong free cash flow margin of 28% enables it to reinvest or return capital consistently

At $394.17 per share, Nova trades at 41.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stock Yards Bank (SYBT)

Net Cash Position: $315.1 million (16% of Market Cap)

Founded in 1904 in Louisville and named after the city's historic livestock market district, Stock Yards Bancorp (NASDAQ:SYBT) operates a regional bank providing commercial banking, wealth management, and trust services across Kentucky, Indiana, and Ohio.

Why Does SYBT Stand Out?

1. Annual revenue growth of 16.7% over the last five years was superb and indicates its market share increased during this cycle
2. Annual net interest income growth of 17.1% over the last five years was superb and indicates its market share increased during this cycle
3. Annual tangible book value per share growth of 18.5% over the last two years was superb and indicates its capital strength increased during this cycle

Stock Yards Bank is trading at $66.70 per share, or 1.9x forward P/B. 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

Check out the high-quality names we’ve flagged in 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 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.