1 Cash-Heavy Stock on Our Watchlist and 2 We Brush Off

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.

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. Keeping that in mind, here is one company with a net cash position that can continue growing sustainably and two with hidden risks.

Two Stocks to Sell:

STAAR Surgical (STAA)

Net Cash Position: $137 million (15.8% of Market Cap)

With over 2.5 million implants performed worldwide, STAAR Surgical (NASDAQ:STAA) designs and manufactures implantable lenses that correct vision problems without removing the eye's natural lens.

Why Do We Steer Clear of STAA?

1. Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
2. Free cash flow margin shrank by 37.3 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Waning returns on capital imply its previous profit engines are losing steam

STAAR Surgical is trading at $17.39 per share, or 31.6x forward P/E. Check out our free in-depth research report to learn more about why STAA doesn’t pass our bar.

American Financial Group (AFG)

Net Cash Position: -$93 million (-0.9% of Market Cap)

With roots dating back to 1872 and a business model that empowers local decision-making, American Financial Group (NYSE:AFG) is an insurance holding company that specializes in commercial property and casualty insurance products for businesses through its Great American Insurance Group.

Why Does AFG Worry Us?

1. Net premiums earned expanded by 3.9% annually over the last two years, falling below our expectations for the insurance sector
2. Earnings per share fell by 1.3% annually over the last two years while its revenue grew, showing its incremental sales were much less profitable
3. Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 6% annually over the last five years

American Financial Group’s stock price of $132.75 implies a valuation ratio of 2.1x forward P/B. Read our free research report to see why you should think twice about including AFG in your portfolio.

One Stock to Watch:

NetApp (NTAP)

Net Cash Position: $486 million (2.4% of Market Cap)

Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ:NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.

Why Are We Positive On NTAP?

1. Business is winning new contracts that can potentially increase in value as its billings growth averaged 7.2% over the past two years
2. Adjusted operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
3. NTAP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business

At $102.99 per share, NetApp trades at 12.4x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Strong Momentum 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.