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.
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 is one company with a net cash position that balances growth with stability and two that may struggle.
Two Stocks to Sell:
Vishay Precision (VPG)
Net Cash Position: $29.17 million (7.8% 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?
- Annual sales declines of 9.6% for the past two years show its products and services struggled to connect with the market during this cycle
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 6.3 percentage points
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 22.5% annually
Vishay Precision’s stock price of $28.10 implies a valuation ratio of 23.3x forward P/E. Check out our free in-depth research report to learn more about why VPG doesn’t pass our bar.
Align Technology (ALGN)
Net Cash Position: $786.5 million (5.7% of Market Cap)
Pioneering an alternative to traditional metal braces with nearly invisible plastic aligners, Align Technology (NASDAQ: ALGN) designs and manufactures Invisalign clear aligners, iTero intraoral scanners, and dental CAD/CAM software for orthodontic and restorative treatments.
Why Do We Think Twice About ALGN?
- Weak clear aligner shipments over the past two years show it’s struggled to increase its sales volumes and had to rely on price increases
- 7.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Diminishing returns on capital suggest its earlier profit pools are drying up
Align Technology is trading at $189.41 per share, or 18.5x forward P/E. To fully understand why you should be careful with ALGN, check out our full research report (it’s free).
One Stock to Buy:
Comfort Systems (FIX)
Net Cash Position: $136.9 million (0.7% of Market Cap)
Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.
Why Is FIX a Top Pick?
- Average backlog growth of 30.5% over the past two years shows it has a steady sales pipeline that will drive future orders
- Earnings per share have massively outperformed its peers over the last two years, increasing by 67.6% annually
- Rising returns on capital show management is finding more attractive investment opportunities
At $544.48 per share, Comfort Systems trades at 28.7x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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-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
