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.
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 are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
ePlus (PLUS)
Net Cash Position: $282.8 million (15% of Market Cap)
Starting as a financing company in 1990 before evolving into a full-service technology provider, ePlus (NASDAQ: PLUS) provides comprehensive IT solutions, professional services, and financing options to help organizations optimize their technology infrastructure and supply chain processes.
Why Do We Think PLUS Will Underperform?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Underwhelming 14.1% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its falling returns suggest its earlier profit pools are drying up
ePlus is trading at $71.24 per share, or 15.6x forward P/E. If you’re considering PLUS for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Vita Coco (COCO)
Net Cash Position: $153.6 million (7.3% of Market Cap)
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ: COCO) offers coconut water products that are a natural way to quench thirst.
Why Is COCO Interesting?
- Unit sales were phenomenal over the past two years, showing demand is robust and retailers can’t stock enough of its products
- Earnings per share grew by 133% annually over the last three years and trumped its peers
- Industry-leading 33.4% return on capital demonstrates management’s skill in finding high-return investments, and its returns are climbing as it finds even more attractive growth opportunities
At $38.40 per share, Vita Coco trades at 30.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Cadence Bank (CADE)
Net Cash Position: $710.3 million (11.2% of Market Cap)
With roots dating back to 1885 and a strategic focus on middle-market commercial lending, Cadence Bancorporation (NYSE: CADE) is a bank holding company that provides commercial banking, retail banking, and wealth management services to middle-market businesses and individuals.
Why Do We Like CADE?
- Annual net interest income growth of 20% over the last four years was superb and indicates its market share increased during this cycle
- Earnings per share grew by -2.4% annually over the last two years and topped the peer group average
- Impressive 22% annual tangible book value per share growth over the last two years indicates it’s building equity value this cycle
Cadence Bank’s stock price of $34.01 implies a valuation ratio of 1.1x forward P/B. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
