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 are two companies with net cash positions that can leverage their balance sheets to grow and one that may struggle.
One Bank Stock to Sell:
Hope Bancorp (HOPE)
Net Cash Position: $344.3 million (25.5% of Market Cap)
With roots in serving Korean-American communities and now expanded to a multi-ethnic clientele across 12 states, Hope Bancorp (NASDAQ: HOPE) operates Bank of Hope, providing commercial and retail banking services with a focus on serving multi-ethnic communities across the United States.
Why Should You Sell HOPE?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 11% annually over the last two years
- Net interest income was flat over the last five years, indicating it’s failed to expand this cycle
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
Hope Bancorp’s stock price of $10.52 implies a valuation ratio of 0.6x forward P/B. Check out our free in-depth research report to learn more about why HOPE doesn’t pass our bar.
Two Bank Stocks to Watch:
TriCo Bancshares (TCBK)
Net Cash Position: $223.5 million (15.7% of Market Cap)
Founded in 1975 and headquartered in Chico, California, TriCo Bancshares (NASDAQ: TCBK) operates Tri Counties Bank, providing personal, small business, and commercial banking services through branches across California.
Why Are We Fans of TCBK?
- Additional sales over the last five years increased its profitability as the 11% annual growth in its earnings per share outpaced its revenue
- Annual tangible book value per share growth of 16.2% over the past two years was outstanding, reflecting strong capital accumulation this cycle
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $43.86 per share, TriCo Bancshares trades at 1.1x forward P/B. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
East West Bank (EWBC)
Net Cash Position: $2.08 billion (14.9% of Market Cap)
As the largest independent bank in the U.S. focused on bridging financial services between America and Asia, East West Bancorp (NASDAQ: EWBC) operates a commercial bank that provides personal and business banking services with a unique focus on facilitating U.S.-Asia cross-border transactions.
Why Will EWBC Beat the Market?
- Annual net interest income growth of 12.4% over the past five years was outstanding, reflecting market share gains this cycle
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Balance sheet strength has increased this cycle as its 12.4% annual tangible book value per share growth over the last five years was exceptional
East West Bank is trading at $102.50 per share, or 1.6x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
