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:
Power Integrations (POWI)
Net Cash Position: $249.5 million (6.1% 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 Steer Clear of POWI?
- Annual sales declines of 1.9% for the past five years show its products and services struggled to connect with the market during this cycle
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6%
- Operating margin declined by 22.6 percentage points over the last five years as its sales cratered
Power Integrations’s stock price of $73.27 implies a valuation ratio of 57.9x forward P/E. Check out our free in-depth research report to learn more about why POWI doesn’t pass our bar.
TechnipFMC (FTI)
Net Cash Position: $540.4 million (1.8% of Market Cap)
Operating a fleet of 16 specialized vessels that install equipment on the seafloor, TechnipFMC (NYSE:FTI) designs and manufactures subsea systems that control the flow of oil and natural gas from the ocean floor to processing facilities.
Why Does FTI Worry Us?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.5% annually over the last five years
- Gross margin of 17.5% reflects its high production costs and unfavorable asset base
TechnipFMC is trading at $75.70 per share, or 24.5x forward P/E. Dive into our free research report to see why there are better opportunities than FTI.
One Stock to Watch:
First BanCorp (FBP)
Net Cash Position: $260.2 million (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 Are We Fans of FBP?
- Differentiated product suite leads to a Strong performance of its loan book is reflected in its High-yielding loan book and low cost of funds lead to a best-in-class net interest margin of 4.6%
- Non-interest operating profits increased over the last five years as the firm gained some leverage on its fixed costs and became more efficient
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
At $24.32 per share, First BanCorp trades at 1.8x forward P/B. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.