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. That said, here are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Stock to Sell:
T. Rowe Price (TROW)
Net Cash Position: $3.71 billion (14.7% of Market Cap)
Founded in 1937 by Thomas Rowe Price Jr., who pioneered the growth stock investing approach, T. Rowe Price (NASDAQ:TROW) is an investment management firm that offers mutual funds, advisory services, and retirement planning solutions to individuals and institutions.
Why Are We Cautious About TROW?
- Sales trends were unexciting over the last five years as its 2.6% annual growth was below the typical financials company
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 1.4% annually while its revenue grew
T. Rowe Price is trading at $117.88 per share, or 11.5x forward P/E. Read our free research report to see why you should think twice about including TROW in your portfolio.
Two Stocks to Watch:
Watts Water Technologies (WTS)
Net Cash Position: $176.9 million (1.5% of Market Cap)
Founded in 1874, Watts Water (NYSE:WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Why Will WTS Beat the Market?
- Annual revenue growth of 10.7% over the last five years was superb and indicates its market share increased during this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 21.9% to outpace its revenue gains
- Free cash flow margin grew by 6.1 percentage points over the last five years, giving the company more chips to play with
Watts Water Technologies’s stock price of $354.50 implies a valuation ratio of 29x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Globus Medical (GMED)
Net Cash Position: $529.5 million (5.1% of Market Cap)
With operations spanning 64 countries and a portfolio of over 10 new products launched in 2023 alone, Globus Medical (NYSE:GMED) develops and sells implantable devices, surgical instruments, and technology solutions for spine, orthopedic, and neurosurgical procedures.
Why Are We Positive on GMED?
- Annual revenue growth of 30.3% over the past five years was outstanding, reflecting market share gains this cycle
- Constant currency growth averaged 22.8% over the past two years, showing it can expand globally regardless of the macroeconomic environment
- Earnings per share grew by 22.2% annually over the last five years and trumped its peers
At $77.75 per share, Globus Medical trades at 16.8x forward P/E. Is now the time to initiate a position? 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 is 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% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.