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.
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 are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
Hudson Technologies (HDSN)
Net Cash Position: $34.17 million (12.9% of Market Cap)
Founded in 1991, Hudson Technologies (NASDAQ: HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.
Why Are We Hesitant About HDSN?
- Sales tumbled by 7.6% annually over the last two years, showing market trends are working against its favor during this cycle
- Sales were less profitable over the last two years as its earnings per share fell by 39.1% annually, worse than its revenue declines
- Eroding returns on capital suggest its historical profit centers are aging
Hudson Technologies is trading at $6.23 per share, or 14.8x forward P/E. Dive into our free research report to see why there are better opportunities than HDSN.
Two Stocks to Watch:
ResMed (RMD)
Net Cash Position: $817.3 million (2.6% of Market Cap)
Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE: RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.
Why Do We Like RMD?
- Constant currency growth averaged 9.1% over the past two years, showing it can expand globally regardless of the macroeconomic environment
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 15.2% annually, topping its revenue gains
- Free cash flow margin jumped by 21.4 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $211.75 per share, ResMed trades at 17.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Texas Pacific Land (TPL)
Net Cash Position: $127 million (0.4% of Market Cap)
One of America's largest private landowners with roughly 868,000 acres in the Permian Basin, Texas Pacific Land (NYSE: TPL) owns land in West Texas and earns revenue from oil and gas royalties, water services, and land leases.
Why Will TPL Beat the Market?
- Annual revenue growth of 26.2% over the last ten years was superb and indicates its market share increased during this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 95%
- TPL is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Texas Pacific Land’s stock price of $441.43 implies a valuation ratio of 32.8x forward EV-to-EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
