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 are two companies with net cash positions that balance growth with stability and one that may struggle.
One Stock to Sell:
Dime Community Bancshares (DCOM)
Net Cash Position: $916.2 million (51.3% of Market Cap)
With roots dating back to 1910 and a name that evokes the historic "dime savings banks" of America's past, Dime Community Bancshares (NASDAQ: DCOM) is a New York-based bank holding company that provides commercial banking and financial services to businesses and consumers throughout Greater Long Island.
Why Is DCOM Not Exciting?
- Net interest margin of 3% reflects its high servicing and capital costs
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.2% annually
- Capital trends were unexciting over the last two years as its 6.5% annual tangible book value per share growth was below the typical banking firm
Dime Community Bancshares is trading at $40.44 per share, or 1.2x forward P/B. Dive into our free research report to see why there are better opportunities than DCOM.
Two Stocks to Watch:
Reddit (RDDT)
Net Cash Position: $2.77 billion (9.4% of Market Cap)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Are We Bullish on RDDT?
- Domestic Daily Active Visitors have grown by 13.2% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Switching costs of its platform were on full display over the last two years as it not only grew engagement but also increased the average revenue per user by 47.1% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
Reddit’s stock price of $151.78 implies a valuation ratio of 16x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Berkshire Hathaway (BRK.A)
Net Cash Position: $204.3 billion (18.9% of Market Cap)
Led by legendary investor Warren Buffett since 1965, transforming it from a struggling textile manufacturer into a corporate giant, Berkshire Hathaway (NYSE: BRK.A) is a diversified holding company that owns businesses across insurance, railroads, utilities, manufacturing, retail, and services sectors.
Why Does BRK.A Catch Our Eye?
- Earnings growth has easily exceeded the peer group average over the last two years as its EPS has compounded at 18.9% annually
- Balance sheet strength has increased this cycle as its 15.9% annual tangible book value per share growth over the last five years was exceptional
- Industry-leading 13.2% return on equity demonstrates management’s skill in finding high-return investments
At $756,268 per share, Berkshire Hathaway trades at 22.6x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
