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. Keeping that in mind, here are two companies with net cash positions that can leverage their balance sheets to grow and one with hidden risks.
One Stock to Sell:
Vishay Precision (VPG)
Net Cash Position: $42.89 million (5.5% of Market Cap)
Emerging from Vishay Intertechnology in 2010, Vishay Precision (NYSE: VPG) operates as a global provider of precision measurement and sensing technologies.
Why Do We Avoid VPG?
- Sales tumbled by 7% annually over the last two years, showing market trends are working against its favor during this cycle
- Earnings per share fell by 16.2% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
At $55.75 per share, Vishay Precision trades at 76.7x forward P/E. Check out our free in-depth research report to learn more about why VPG doesn’t pass our bar.
Two Stocks to Watch:
Erie Indemnity (ERIE)
Net Cash Position: $273 million (2.3% of Market Cap)
Operating under a unique business model dating back to 1925, Erie Indemnity (NASDAQ: ERIE) serves as the attorney-in-fact for Erie Insurance Exchange, managing policy issuance, claims handling, and investment services for this reciprocal insurer.
Why Are We Bullish on ERIE?
- Annual revenue growth of 9.9% over the last five years beat the sector average and underscores the unique value of its offerings
- Impressive 14.3% annual book value per share growth over the last five years indicates it’s building equity value this cycle
- Industry-leading 26.7% return on equity demonstrates management’s skill in finding high-return investments
Erie Indemnity is trading at $235 per share, or 3x trailing 12-month price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
East West Bank (EWBC)
Net Cash Position: $1.34 billion (7.9% of Market Cap)
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ: EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Why Could EWBC Be a Winner?
- 13.9% annual net interest income growth over the last five years surpassed the sector average as its loans resonated with borrowers
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 17.9% exceeded its revenue gains over the last five years
- Impressive 12.9% annual tangible book value per share growth over the last five years indicates it’s building equity value this cycle
East West Bank’s stock price of $124.92 implies a valuation ratio of 1.7x forward P/B. Is now the right time to buy? Find out in our full 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.
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
