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.
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 is one company with a net cash position that can leverage its balance sheet to grow and two best left off your watchlist.
Two stocks to sell:
Vishay Intertechnology (VSH)
Net cash position: $381.6 million (9.6% of Market Cap)
Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE: VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.
Why Do We Pass on VSH?
- Sales trends were unexciting over the last five years as its 2.7% annual growth was below the typical semiconductor company
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 20.7% annually
- Cash-burning history and the downward spiral in its margin profile make us wonder if it has a viable business model
At $25.48 per share, Vishay Intertechnology trades at 16.9x forward P/E. Dive into our free research report to see why there are better opportunities than VSH.
First Bancorp (FBNC)
Net cash position: $461.3 million (16.9% of Market Cap)
Founded during the Great Depression in 1934 and originally known as Montgomery Bancorp, First Bancorp (NASDAQ: FBNC) is a community-oriented commercial bank providing a wide range of financial services to businesses and individuals in North and South Carolina.
Why Is FBNC Not Exciting?
- Annual revenue growth of 9.8% over the last five years was below our standards for the banking sector
- Annual earnings per share growth of 4.4% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- Low return on equity reflects management’s struggle to allocate funds effectively
First Bancorp is trading at $66 per share, or 1.5x forward P/B. Read our free research report to see why you should think twice about including FBNC in your portfolio.
One stock to buy:
Texas Pacific Land (TPL)
Net cash position: $354.3 million (1.8% of Market Cap)
One of America's largest private landowners with roughly 868,000 acres in the Permian Basin, Texas Pacific Land (NYSE: TPL) owns land in West Texas and earns revenue from oil and gas royalties, water services, and land leases.
Why Is TPL a Top Pick?
- Market share has increased this cycle as its 33% annual revenue growth over the last ten years was exceptional
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 94.8%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Texas Pacific Land’s stock price of $295.50 implies a valuation ratio of 23x forward EV-to-EBITDA. Is now the time to initiate a position? 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.
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.
