1 Cash-Heavy Stock Worth Investigating and 2 We Avoid

SelfRugger

2026-03-05 19:26:02

1 Cash-Heavy Stock Worth Investigating and 2 We Avoid

Petr Huřťák

Thu, February 12, 2026 at 1:35 PM GMT+9 4 min read

In this article:

GME

-2.46%

ARLO

-6.55%

UDMY

-2.55%

Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.

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 is one company with a net cash position that can leverage its balance sheet to grow and two that may struggle.

Two Stocks to Sell:

Udemy (UDMY)

Net Cash Position: $348.7 million (52.7% of Market Cap)

With courses ranging from investing to cooking to computer programming, Udemy (NASDAQ:UDMY) is an online learning platform that connects learners with expert instructors who specialize in a wide range of topics.

Why Are We Hesitant About UDMY?

Modest 6.6% annual growth in monthly active buyers over the last two years indicates potential challenges in customer acquisition and retention

Platform has lost its luster lately as engagement trends have been sluggish and its average revenue per buyer has declined by 2.2% annually

High marketing expenses suggest it needs to spend heavily on new customer acquisition to sustain momentum

At $4.58 per share, Udemy trades at 3.4x forward EV/EBITDA. If you’re considering UDMY for your portfolio, see our FREE research report to learn more.

GameStop (GME)

Net Cash Position: $4.46 billion (41.1% of Market Cap)

Drawing gaming fans with demo units set up with the latest releases, GameStop (NYSE:GME) sells new and used video games, consoles, and accessories, as well as pop culture merchandise.

Why Do We Pass on GME?

GameStop’s brick-and-mortar engine keeps stalling as gamers migrate to digital downloads, and management is closing more outlets after shuttering hundreds of stores last year

The share price remains an unpredictable meme-stock roller-coaster, and the purchase of thousands of Bitcoins have fueled huge swings

On the bright side, the company has a large cash pile that gives CEO Ryan Cohen room to buy more Bitcoin or fund its collectibles and trading-card push

GameStop’s stock price of $24.24 implies a valuation ratio of 29.2x forward P/E. To fully understand why you should be careful with GME, check out our full research report (it’s free).

One Stock to Watch:

Arlo Technologies (ARLO)

Net Cash Position: $156.7 million (12.8% of Market Cap)

Originally spun off from networking equipment maker Netgear in 2018, Arlo Technologies (NYSE:ARLO) provides cloud-based smart security devices and subscription services that help consumers and businesses monitor and protect their homes, properties, and loved ones.

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Why Could ARLO Be a Winner?

Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage

Incremental sales over the last two years have been highly profitable as its earnings per share increased by 120% annually, topping its revenue gains

Free cash flow margin jumped by 16.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

Arlo Technologies is trading at $11.83 per share, or 16.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

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 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.

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