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 is one company with a net cash position that can leverage its balance sheet to grow and two with hidden risks.

Two Stocks to Sell:

Vishay Precision (VPG)

Net Cash Position: $23.91 million (7.5% 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?

1. Sales tumbled by 8.1% annually over the last two years, showing market trends are working against its favor during this cycle
2. Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 3.9 percentage points
3. Incremental sales over the last five years were much less profitable as its earnings per share fell by 13.4% annually while its revenue grew

At $23.52 per share, Vishay Precision trades at 22.6x forward P/E. If you’re considering VPG for your portfolio, see our FREE research report to learn more.

West Pharmaceutical Services (WST)

Net Cash Position: $179.8 million (1.2% of Market Cap)

Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE:WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.

Why Are We Wary of WST?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
2. Efficiency has decreased over the last two years as its adjusted operating margin fell by 5.7 percentage points
3. Eroding returns on capital suggest its historical profit centers are aging

West Pharmaceutical Services is trading at $210.26 per share, or 32.9x forward P/E. Check out our free in-depth research report to learn more about why WST doesn’t pass our bar.

One Stock to Watch:

Electronic Arts (EA)

Net Cash Position: $1.27 billion (3.4% of Market Cap)

Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ:EA) is one of the world’s largest video game publishers.

Why Does EA Stand Out?

1. Brand halo makes it a customer acquisition machine that onboards new users at scale without spending much money
2. Highly efficient business model is illustrated by its impressive 36.2% EBITDA margin
3. Strong free cash flow margin of 27% enables it to reinvest or return capital consistently

Electronic Arts’s stock price of $145.10 implies a valuation ratio of 14.1x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks That Overcame Trump’s 2018 Tariffs

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.