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.
Financial flexibility is valuable, but it’s not everything - at StockStory, we help you find the stocks that can not only survive but also outperform. Keeping that in mind, here is one company with a net cash position that balances growth with stability and two best left off your watchlist.
Two Stocks to Sell:
Power Integrations (POWI)
Net Cash Position: $289.3 million (9.5% of Market Cap)
A leading supplier of parts for electronics such as home appliances, Power Integrations (NASDAQ: POWI) is a semiconductor designer and developer specializing in products used for high-voltage power conversion.
Why Do We Avoid POWI?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Efficiency has decreased over the last five years as its operating margin fell by 11.7 percentage points
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
Power Integrations’s stock price of $53.64 implies a valuation ratio of 31.4x forward P/E. Dive into our free research report to see why there are better opportunities than POWI.
Hope Bancorp (HOPE)
Net Cash Position: $2.55 billion (198% of Market Cap)
With roots in serving Korean-American communities and now expanded to a multi-ethnic clientele across 12 states, Hope Bancorp (NASDAQ: HOPE) operates Bank of Hope, providing commercial and retail banking services with a focus on serving multi-ethnic communities across the United States.
Why Should You Dump HOPE?
- Net interest income tumbled by 3.2% annually over the last four years, showing market trends are working against its favor during this cycle
- Operating profits fell over the last four years as its sales dropped and it struggled to adjust its fixed costs
- Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable
At $10.08 per share, Hope Bancorp trades at 0.6x forward P/B. If you’re considering HOPE for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
First BanCorp (FBP)
Net Cash Position: $1.12 billion (35.7% of Market Cap)
Tracing its roots back to 1948 in San Juan, First BanCorp (NYSE: FBP) is a bank holding company that provides commercial banking, consumer financing, mortgage services, and insurance products across Puerto Rico, the U.S. mainland, and the Caribbean.
Why Will FBP Outperform?
- Annual revenue growth of 7.8% over the last five years beat the sector average and underscores the unique value of its offerings
- Share buybacks catapulted its annual earnings per share growth to 8.3%, which outperformed its revenue gains over the last two years
- ROE punches in at 16.5%, illustrating management’s expertise in identifying profitable investments
First BanCorp is trading at $19.52 per share, or 1.7x forward P/B. Is now the right time to buy? Find out 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 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% 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
