In this article, we discuss 10 Cash-Rich Small Cap Stocks To Invest In According To Analysts.
Small-cap stocks in the US have been under pressure, with the Russell small cap index falling 10% from its November highs as of January 2025. In contrast, the S&P index, which tracks large-cap stocks, declined by less than 3% during the same period. President Trump’s focus on domestic economic growth could make small-cap stocks more attractive. However, the prospect of higher interest rates has become a major hurdle. Rising borrowing costs tend to impact smaller companies more than larger ones. Keith Lerner, co-chief investment officer at Truist Advisory Services, described this as a “tug of war” – where strong economic growth could benefit small caps, but higher rates work against them.
Market sentiment toward small caps has weakened due to expectations of fewer interest rate cuts, especially after the Federal Reserve raised its inflation forecast for 2025. Despite this, some experts believe small businesses could benefit from Trump’s policies, particularly reduced regulations and support for domestic industries. Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, pointed out that small companies are more US-focused than multinational corporations. However, Trump’s approach to tariffs could create challenges by disrupting supply chains, which may hurt smaller businesses too.
After years of trailing behind large-cap stocks, small caps finally seem ready for a comeback, according to RBC Wealth Management. Over the past five years, major economic and global events, such as pandemic-led lockdowns, economic rebounds, government stimulus, inflation, rising interest rates, and the rapid rise of AI, have widened the gap between small and large-cap stock performance. Large-cap stocks have delivered solid returns in four of the last five years, leaving small caps struggling to keep up. Historically, factors such as mergers and acquisitions and initial public offerings have played a key role in small-cap growth, but IPO activity in the small-cap space has been weak.
Although 2024 saw some improvement, with an average of 31 IPOs per quarter and $7 billion in total value, these numbers are still below pre-pandemic levels. That said, signs of a recovery started to emerge toward the end of 2024. Looking ahead, 2025 may be a turning point for small caps, as per RBC’s report. The Federal Reserve’s move toward lower interest rates could encourage businesses to take more risks, boosting M&A and IPO activity. As conditions improve, small caps could start closing the gap with large caps. Lower rates, increased corporate expansion, stronger market activity, and a more supportive regulatory environment could fuel small-cap growth. In addition, with large caps becoming expensive and investor expectations rising, more investors may look toward undervalued small-cap stocks for better opportunities.
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Our Methodology
For this article, we used the Finviz stock screener to find small-cap stocks with strong cash reserves. We filtered for companies with market caps between $300 million and $2 billion and a current ratio (CR) above 2, which indicates they have more assets than liabilities, due to high cash reserves, receivables, or inventory. After that, we manually looked for companies with a trailing twelve-month (TTM) operating cash flow of over $50 million as of December 31, 2024. From there, we picked 10 stocks with the highest cash reserves. These stocks also had an average upside potential of more than 20% based on Wall Street analyst estimates as of March 4. We included hedge fund sentiment as of Q4 2024 as well. Below, we have ranked the list in ascending order of upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN)
TTM Operating Cash Flow as of December 31, 2024: $171,951,000
Number of Hedge Fund Holders: 27
Average Upside Potential: 23.17%
Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) is a biopharmaceutical firm that develops and sells treatments for central nervous system disorders in the United States. The company is currently under investigation by Levi & Korsinsky for potential violations of federal securities laws, as announced on March 3, 2025. However, Wall Street analysts remain optimistic, as the stock still holds an average upside potential of 23.17% as of March 4.
Even after losing exclusivity on Trokendi XR and Oxtellar XR, Supernus saw a 25% increase in total revenue for 2024, excluding these two products. This growth was driven by Qelbree’s strong performance, with annual prescriptions rising by 25% and net sales increasing by 72%. In the fourth quarter alone, prescriptions hit a record high of 214,600. Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN) reported adjusted operating earnings of $183.7 million, a 47% increase from the previous year’s $125.1 million. By the end of 2024, the company held approximately $454 million in cash, cash equivalents, and marketable securities, up from $271 million in 2023, mainly fueled by robust cash flow from operations. Supernus is one of the best cash rich stocks to invest in.
As per Insider Monkey’s fourth quarter database, 27 hedge funds were bullish on Supernus Pharmaceuticals, Inc. (NASDAQ:SUPN), an increase from 20 funds in the preceding quarter. Steven Boyd’s Armistice Capital was the largest position holder in the company, with 4.8 million shares worth $174.8 million.
9. Certara, Inc. (NASDAQ:CERT)
TTM Operating Cash Flow as of December 31, 2024: $80,466,000
Number of Hedge Fund Holders: 20
Average Upside Potential: 25.64%
Certara, Inc. (NASDAQ:CERT) provides biosimulation technology and solutions to support model-informed drug development in the United States and internationally. The firm offers a number of tools, including biosimulation solutions to predict pharmacokinetics and pharmacodynamics. On February 27, TD Cowen initiated coverage on the stock with a Buy rating and a price target of $16. Analysts expect the company to experience above-average growth due to the increasing adoption of biosimulation in the pharmaceutical sector. It is one of the best cash rich stocks to watch.
In the fourth quarter of 2024, Certara, Inc. (NASDAQ:CERT) made $144.5 million in bookings, a 22% increase from the previous year. This growth was driven by a 38% rise in software bookings and a 12% increase in services. The company experienced strong demand for its software and biosimulation services from its Tier 1 and Tier 3 customers, as drug developers continue to rely on biosimulation to improve their development processes. Adjusted EBITDA rose to $33.5 million in Q4, up from $29.6 million in the same period of 2023. By the end of the quarter, Certara had $179.2 million in cash and cash equivalents.
According to Insider Monkey’s fourth quarter database, 20 hedge funds were bullish on Certara, Inc. (NASDAQ:CERT), compared to 18 funds in the prior quarter. Ken Griffin’s Citadel Investment Group was the leading stakeholder of the company, with 1.6 million shares valued at $17.16 million.
8. CONMED Corporation (NYSE:CNMD)
TTM Operating Cash Flow as of December 31, 2024: $166,968,000
Number of Hedge Fund Holders: 22
Average Upside Potential: 30.66%
CONMED Corporation (NYSE:CNMD) is a medical technology company that designs, develops, and markets surgical devices and equipment in the US and globally. It provides a wide range of orthopedic surgery products. On March 3, the company disclosed that Fisher Asset Management increased its stake in the company by 41.4% during the fourth quarter. The fund added 122,140 shares to its portfolio, bringing its total ownership to 417,430 shares. It is ranked 8th on our list of the best cash rich stocks.
CONMED Corporation (NYSE:CNMD) reported GAAP net income of $33.8 million for the fourth quarter, up from $33.1 million in the same period last year. After adjusting for special items, Q4 net income rose 26.2% year-over-year to $41.8 million. For the full year, revenue reached $1.307 billion, reflecting a 5% increase. While overall sales growth in 2024 fell short of expectations, the company improved profitability through a better product mix and improved cost management. Operating cash flow for the year surged 33.2% to $167 million, compared to $125.3 million in 2023, with adjusted EPS growing 20.9%. Despite supply challenges, the firm strengthened its cash flow and positioned itself for long-term stability.
As per Insider Monkey’s fourth quarter database, 22 hedge funds were bullish on CONMED Corporation (NYSE:CNMD), up from 19 funds in the last quarter. James E. Flynn’s Deerfield Management was the largest shareholder of the firm, with 611,964 shares worth nearly $42 million.
7. LiveRamp Holdings, Inc. (NYSE:RAMP)
TTM Operating Cash Flow as of December 31, 2024: $122,319,000
Number of Hedge Fund Holders: 33
Average Upside Potential: 33.24%
LiveRamp Holdings, Inc. (NYSE:RAMP), one of the best cash rich stocks, is a technology company that provides a data collaboration platform across the United States, Europe, the Asia-Pacific, and other regions. Its platform offers a range of people-based marketing solutions, including data sharing, identity management, activation, analytics, and access to a data marketplace. On February 26, Benchmark analysts upheld their Buy rating on the stock and kept the price target at $45. Analysts praise the company’s efforts to simplify pricing, expecting higher revenue and cost savings.
In the third quarter of fiscal year 2025, LiveRamp Holdings, Inc. (NYSE:RAMP) saw a 12% surge in revenue, marking its fourth consecutive quarter of double-digit growth. Fiscal year-to-date free cash flow also reached $91 million, reflecting a 20% year-over-year increase. This growth was driven by several factors, including an improved IT spending environment as economic and policy concerns eased. Additionally, more customers are recognizing the importance of data collaboration in measuring outcomes across high-growth advertising channels like CTV, commerce media, and social platforms.
According to Insider Monkey’s fourth quarter database, 33 hedge funds were bullish on LiveRamp Holdings, Inc. (NYSE:RAMP), compared to 29 funds in the previous quarter.
6. GoodRx Holdings, Inc. (NASDAQ:GDRX)
TTM Operating Cash Flow as of December 31, 2024: $155,017,000
Number of Hedge Fund Holders: 27
Average Upside Potential: 37.30%
GoodRx Holdings, Inc. (NASDAQ:GDRX) provides tools and information to help consumers compare prices and save on prescription medications in the US. Additionally, the company offers healthcare services such as subscriptions, pharmaceutical manufacturer solutions, and virtual care through its GoodRx Care platform. It is one of the best cash rich stocks to invest in.
In the fourth quarter of 2024, GoodRx Holdings, Inc. (NASDAQ:GDRX) raked in a revenue of $198.6 million, with adjusted EBITDA reaching $67.1 million. For the full year 2024, revenue grew 6% year-over-year on a GAAP basis, amounting to $792.3 million. Prescription transaction revenue rose 5% to $577.5 million, driven by a 7% increase in monthly active consumers. Meanwhile, subscription revenue declined 8% to $86.5 million, mainly due to the discontinuation of a retailer-specific prescription savings program in July 2024. The company generated $183.9 million in net cash from operations in 2024, up from $138.3 million in 2023. By year-end, it had $448.3 million in cash on hand and $500 million in outstanding debt.
According to Insider Monkey’s fourth quarter database, 27 hedge funds were bullish on GoodRx Holdings, Inc. (NASDAQ:GDRX), an increase from 20 funds in the last quarter. David Rosen’s Rubric Capital Management held the largest position in the company, with 5.8 million shares worth $27 million.
5. Integral Ad Science Holding Corp. (NASDAQ:IAS)
TTM Operating Cash Flow as of December 31, 2024: $117,898,000
Number of Hedge Fund Holders: 28
Average Upside Potential: 37.84%
Integral Ad Science Holding Corp. (NASDAQ:IAS) is a digital advertising verification company that operates in the US, the UK, France, Ireland, and other regions. It offers IAS Signal, a cloud-based platform designed to help advertisers maximize their return on ad spend. On March 4, Loop Capital Markets maintained a Buy rating on Integral Ad but lowered its price target for the shares from $15 to $13, reflecting its investment potential. IAS is placed 5th on our list of the best cash rich stocks to invest in.
In Q4 2024, Integral Ad Science Holding Corp. (NASDAQ:IAS)’s revenue increased 14% to $153 million, with an adjusted EBITDA margin of 40%. For the full year 2024, revenue grew 12%, reaching $530.1 million at a 36% adjusted EBITDA margin. The company strengthened its market position by advancing its technology, expanding partnerships with key advertisers, platforms, and publishers, and enhancing its leadership team with a new chief operating officer and chief product officer. Strong cash flow and a solid balance sheet were also maintained, with $84 million in cash and cash equivalents at the end of Q4. Looking ahead, IAS expects Q1 2025 revenue to be between $128 million and $131 million, reflecting approximately 13% year-over-year growth at the midpoint.
As per Insider Monkey’s fourth quarter database, 28 hedge funds were bullish on Integral Ad Science Holding Corp. (NASDAQ:IAS), in contrast to the previous quarter when 24 funds had invested in the stock. Robert Smith’s Vista Equity Partners was the biggest stakeholder of the company, with a position worth $678.7 million.
4. Spectrum Brands Holdings, Inc. (NYSE:SPB)
TTM Operating Cash Flow as of December 31, 2024: $94,500,000
Number of Hedge Fund Holders: 38
Average Upside Potential: 40.91%
Spectrum Brands Holdings, Inc. (NYSE:SPB) is a consumer products and home essentials company operating in North America, Latin America, Africa, Europe, the Middle East, and the Asia-Pacific. The company is divided into three segments – Home and Personal Care, Global Pet Care, and Home and Garden. On February 6, Oppenheimer analysts revised their price target for Spectrum Brands Holdings, Inc. (NYSE:SPB), lowering it from $115 to $105. The trimmed price target reflects a lower multiple for its GPC segment. Despite this adjustment, Oppenheimer maintains its Outperform rating for SPB.
In Q1 2025, Spectrum Brands Holdings, Inc. (NYSE:SPB)’s net sales saw a 1.2% increase. Adjusting for unfavorable foreign exchange impact, organic net sales grew by 1.9%, driven by strategic investments in fiscal 2024 aimed at enhancing commercial operations and accelerating revenue growth. At the end of the quarter, the company had around $180 million in cash, with approximately $491 million available from its $500 million cash flow.
According to Insider Monkey’s fourth quarter database, 38 hedge funds were bullish on Spectrum Brands Holdings, Inc. (NYSE:SPB), compared to 37 funds in the preceding quarter.
3. Hillman Solutions Corp. (NASDAQ:HLMN)
TTM Operating Cash Flow as of December 31, 2024: $183,336,000
Number of Hedge Fund Holders: 24
Average Upside Potential: 41.96%
Hillman Solutions Corp. (NASDAQ:HLMN) supplies hardware products and merchandising services across the United States, Latin America, Mexico, Canada, and the Caribbean. Its product range includes anchor shackles, eye bolts, door hinges, chains, garage doors, safety hasps, gate hooks, latches, magnets, and storage hooks, among other hardware essentials. On January 15, Hillman Solutions lowered the interest rate on its $643 million loan, which is due in 2028. This change reduces borrowing costs by 0.25% and is expected to save the company about $1.6 million per year, minus a one-time fee of $1 million. It is one of the best cash rich stocks to watch.
Despite a challenging market in 2024, Hillman Solutions Corp. (NASDAQ:HLMN)’s net sales reached $1.473 billion, slightly below 2023 levels but above the midpoint of the company’s latest guidance. The decline in foot traffic and retail customers, down nearly 6% from the previous year, contributed to the fall. However, in the fourth quarter, adjusted EBITDA rose 3.5% to $56.3 million, aligning with expectations. This growth was backed by improved operational efficiency, lower costs of goods sold, and a shift toward higher-margin products. In 2024, the company generated $183 million in cash from operating activities, down from $283 million in the previous year. In 2023, cash flow benefited from a $100 million inventory reduction as supply levels normalized when Asian supply chain disruptions were resolved.
As per Insider Monkey’s fourth quarter database, 24 hedge funds were bullish on Hillman Solutions Corp. (NASDAQ:HLMN), up from 18 funds in the prior quarter. Leucadia National was the largest position holder in the firm, with approximately 8.5 million shares valued at $82.8 million.
2. Axcelis Technologies, Inc. (NASDAQ:ACLS)
TTM Operating Cash Flow as of December 31, 2024: $140,818,000
Number of Hedge Fund Holders: 27
Average Upside Potential: 44.47%
Axcelis Technologies, Inc. (NASDAQ:ACLS) is involved in designing, manufacturing, and servicing ion implantation and processing equipment for semiconductor chip production. It operates in the US, Europe, Japan, and the Asia-Pacific region. On February 3, the company received the ‘2024 SK hynix CSO Safety and Health Award’, recognizing its commitment to safety and compliance in semiconductor manufacturing. The award, presented in Icheon, Korea, acknowledges suppliers for regulatory compliance and risk reduction in the supply chain. ACLS is one of the best cash rich stocks to monitor.
In the fourth quarter of 2024, Axcelis Technologies, Inc. (NASDAQ:ACLS)’s revenue came in at $252 million, with earnings per diluted share of $1.54. Revenue slightly exceeded expectations, as strong demand for off-the-market CS&I sales helped counter the expected decline in system sales. This growth in the CS&I segment was a major factor behind better-than-expected margins and earnings per share. The firm generated $8 million in free cash flow for the quarter. The reduction in cash flow compared to the prior quarter was due to the timing of cash receipts related to deliveries made during the fourth quarter.
As per Insider Monkey’s fourth quarter database, 27 hedge funds were bullish on Axcelis Technologies, Inc. (NASDAQ:ACLS), compared to 29 funds in the third quarter. Royce & Associates held the biggest position in the company, with 333,426 shares worth $23.3 million.
1. Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY)
TTM Operating Cash Flow as of December 31, 2024: $219,821,000
Number of Hedge Fund Holders: 26
Average Upside Potential: 58.58%
Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) is a pharmaceutical company that develops and commercializes treatments for rare and other neurological disorders in the United States. On February 25, Mizuho Securities maintained its Outperform rating on the stock with a price target of $42. According to Mizuho, the company demonstrates strong financial stability with a 3.24 current ratio and 25.8% revenue growth over the past year.
In 2024, Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) reported net product revenues of $714.7 million, showing a 23% increase from the previous year. Fourth quarter revenue came in at $201.3 million, driven by strong demand for WAKIX in narcolepsy treatment. With over $576 million in cash and cash equivalents, the company is well-positioned to invest in pipeline expansion and drive value for both patients and shareholders, making it one of the best cash rich stocks.
According to Insider Monkey’s fourth quarter database, 26 hedge funds were bullish on Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY), compared to the preceding quarter when 25 funds had invested in the stock. David Kroin’s Deep Track Capital was the leading shareholder of the company, with 1.45 million shares worth approximately $50 million.
Overall, Harmony Biosciences Holdings, Inc. (NASDAQ:HRMY) ranks first on our list of the best cash-rich small cap stocks to buy. While we acknowledge the potential of HRMY to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HRMY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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