Companies with more cash than debt can be financially resilient, but that doesn’t mean they’re all strong investments. Some lack leverage because they struggle to grow or generate consistent profits, making them unattractive borrowers.
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 are two companies with net cash positions that can leverage their balance sheets to grow and one with hidden risks.
One Stock to Sell:
Equitable Holdings (EQH)
Net Cash Position: $4.46 billion (27.6% of Market Cap)
Tracing its roots back to 1859 as one of America's oldest financial institutions, Equitable Holdings (NYSE: EQH) provides retirement planning, asset management, and life insurance products through its two main franchises, Equitable and AllianceBernstein.
Why Is EQH Risky?
- Sizable revenue base leads to growth challenges as its 1.4% annual revenue increases over the last five years fell short of other insurance companies
- Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 2.8% annually
- Annual book value per share declines of 41.6% for the past five years show its capital management struggled during this cycle
Equitable Holdings is trading at $53.18 per share, or 13.3x forward P/B. To fully understand why you should be careful with EQH, check out our full research report (it’s free).
Two Stocks to Watch:
Photronics (PLAB)
Net Cash Position: $558.4 million (46.6% of Market Cap)
Sporting a global footprint of facilities, Photronics (NASDAQ: PLAB) is a manufacturer of photomasks, templates used to transfer patterns onto semiconductor wafers.
Why Do We Like PLAB?
- Operating margin improvement of 14.3 percentage points over the last five years demonstrates its ability to scale efficiently
- Share repurchases over the last five years enabled its annual earnings per share growth of 31.7% to outpace its revenue gains
- Industry-leading 25.4% return on capital demonstrates management’s skill in finding high-return investments, and its returns are growing as it capitalizes on even better market opportunities
Photronics’s stock price of $19.93 implies a valuation ratio of 9.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Integral Ad Science (IAS)
Net Cash Position: $21.13 million (1.5% of Market Cap)
Founded in 2009, Integral Ad Science (NASDAQ: IAS) provides digital advertising verification and optimization solutions, ensuring that ads are viewable by real people in brand-safe environments across various platforms and devices.
Why Could IAS Be a Winner?
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
- Robust free cash flow margin of 22.1% gives it many options for capital deployment
At $8.30 per share, Integral Ad Science trades at 2.3x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market 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 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 Kadant (+351% 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
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