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 best left off your watchlist.
Two Stocks to Sell:
Western Alliance Bancorporation (WAL)
Net Cash Position: $963 million (10.5% of Market Cap)
Operating through five distinct regional banking divisions across the western United States, Western Alliance Bancorporation (NYSE:WAL) provides commercial banking, treasury management, mortgage services, and specialized financial solutions through its banking divisions and subsidiaries.
Why Are We Cautious About WAL?
- 9.8% annual revenue growth over the last two years was slower than its banking peers
- Efficiency ratio is expected to worsen by 5 percentage points over the next year
- Incremental sales over the last two years were much less profitable as its earnings per share fell by 5.8% annually while its revenue grew
Western Alliance Bancorporation is trading at $84.07 per share, or 1.3x forward P/B. Check out our free in-depth research report to learn more about why WAL doesn’t pass our bar.
First Financial Bankshares (FFIN)
Net Cash Position: $979.6 million (23% of Market Cap)
With roots dating back to 1890 and a network spanning over 70 locations across the Lone Star State, First Financial Bankshares (NASDAQ:FFIN) is a Texas-focused regional bank providing commercial banking, trust services, and wealth management across numerous communities throughout the state.
Why Are We Hesitant About FFIN?
- Sales trends were unexciting over the last five years as its 5.8% annual growth was below the typical banking company
- Net interest income trends were unexciting over the last five years as its 7.7% annual growth was below the typical banking firm
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 5.3% annually
First Financial Bankshares’s stock price of $29.87 implies a valuation ratio of 2.3x forward P/B. To fully understand why you should be careful with FFIN, check out our full research report (it’s free for active Edge members).
One Stock to Buy:
Datadog (DDOG)
Net Cash Position: $2.86 billion (6% of Market Cap)
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ:DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Will DDOG Beat the Market?
- Ability to secure long-term commitments with customers is evident in its 26.5% ARR growth over the last year
- Projected revenue growth of 21.8% for the next 12 months suggests its momentum from the last two years will persist
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
At $135.95 per share, Datadog trades at 12.7x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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.