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.
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:
Pegasystems (PEGA)
Net Cash Position: $365 million (5.1% of Market Cap)
With a "Center-out Business Architecture" approach that transcends organizational silos, Pegasystems (NASDAQ: PEGA) develops software that helps organizations automate workflows and use artificial intelligence to improve customer experiences and business processes.
Why Do We Think Twice About PEGA?
- 11.4% annual revenue growth over the last five years was slower than its software peers
- Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low
- Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage
Pegasystems is trading at $41.99 per share, or 4.2x forward price-to-sales. If you’re considering PEGA for your portfolio, see our FREE research report to learn more.
Eastern Bank (EBC)
Net Cash Position: $102 million (2.2% of Market Cap)
Founded in 1818 as one of America's oldest mutual banks before converting to a public company in 2020, Eastern Bankshares (NASDAQ: EBC) operates as a bank holding company providing commercial and retail banking services primarily in Massachusetts, New Hampshire, and Rhode Island.
Why Is EBC Not Exciting?
- Tangible book value per share tumbled by 4.5% annually over the last five years, showing banking sector trends are working against its favor during this cycle
- Projected tangible book value per share for the next 12 months is flat and suggests profitability will be subdued
- Below-average return on equity indicates management struggled to find compelling investment opportunities
At $21.04 per share, Eastern Bank trades at 1.1x forward P/B. To fully understand why you should be careful with EBC, check out our full research report (it’s free).
One Stock to Watch:
Amalgamated Financial (AMAL)
Net Cash Position: $209.4 million (18.2% of Market Cap)
Founded in 1923 by labor unions seeking a financial institution aligned with worker values, Amalgamated Financial (NASDAQGM:AMAL) operates a values-oriented bank that provides commercial banking, trust services, and investment management to socially responsible organizations and individuals.
Why Do We Like AMAL?
- Net interest margin jumped by 18.7 basis points (100 basis points = 1 percentage point) over the last two years, giving the firm more resources to pursue growth initiatives
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Annual tangible book value per share growth of 9.5% over the past five years was outstanding, reflecting strong capital accumulation this cycle
Amalgamated Financial’s stock price of $38.99 implies a valuation ratio of 1.3x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
