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4 Top-Ranked Liquid Stocks to Boost Portfolio Returns in 2022
Creating a portfolio that includes stocks with healthy liquidity levels is likely to favor investors seeking robust returns.
Liquidity measures a company's capability to meet short-term debt obligations. Stocks with high liquidity levels have always been in demand, owing to their potential to provide maximum returns.
One needs to exercise caution before investing in such stocks. High liquidity may indicate that the company is clearing its dues faster than its peers. However, it may also suggest that the company cannot deploy its assets competently.
Hence, an investor may consider a company's efficiency level in addition to its liquidity for identifying potential winners.
Measures to Identify Liquid Stocks
Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company's potential to meet short- and long-term debt obligations. A current ratio — also known as the working capital ratio — below 1 indicates that the company has more liabilities than assets. However, a high current ratio does not always suggest that the company is in good financial shape. It may also suggest that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.
Quick Ratio: Unlike the current ratio, the quick ratio — also called the "acid-test ratio" or the "quick assets ratio" — reflects a company's ability to pay short-term obligations. It considers inventory excluding the current assets relative to current liabilities. Like the current ratio, a quick ratio of more than 1 is desirable.
Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company's ability to meet current debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.
A ratio greater than 1 is always desirable but may not always represent a company's financial condition.
Here are four of the 12 stocks that qualified for the screen:
North Billerica, MA-based Lantheus Holdings is involved in developing, manufacturing, selling and distributing diagnostic medical imaging agents and products for diagnosing cardiovascular and other diseases. It serves hospitals, clinics, group practices, integrated delivery networks, group purchasing organizations, radio pharmacies and wholesalers. The Zacks Consensus Estimate for 2022 earnings moved up 1.3% to $3.08 per share in the past 60 days. Lantheus has a Growth Score of A and a trailing four-quarter earnings surprise of 77.8%, on average.
Troy, MI-based Skyline Champion Corp. designs, produces and distributes manufactured housing and recreational vehicles. The company has 42 manufacturing facilities across the United States and western Canada. The company also boasts a factory-direct retail business —Titan Factory Direct — and has 30 retail locations, mainly in the southern United States. It also has a transportation business — Star Fleet Trucking.
The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at $5.10 per share, up 6% in the past 60 days. Skyline has a Growth Score of A and a trailing four-quarter earnings surprise of 45.3%, on average.
Lisle, IL-based CTS Corp. manufactures sensors, actuators and electronic components and supplies these products to OEMs in the aerospace, communications, defense, industrial, information technology, medical and transportation markets. The company is expected to keep gaining from continued momentum across end markets. Disciplined capital allocation and strategic acquisitions bode well.
The TEWA Temperature Sensors acquisition has bolstered CTS' presence in Europe. The Zacks Consensus Estimate for 2022 earnings is pegged at $2.40 per share, up 11.6% in the past 60 days. CTS has a Growth Score of A.
Based in Katy, TX, U.S. Silica Holdings makes and markets commercial silica, a specialized mineral, to various attractive end markets in the United States. To serve a wide gamut of end markets, U.S. Silica makes and distributes a range of commercial silica products, including whole grain and ground products and other industrial mineral products that complement its commercial silica products.
Oil and gas proppants is the company's biggest end market. The Zacks Consensus Estimate for its 2022 earnings is pegged at 80 cents per share, up 5.3% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 41.8%, on average.
Get the remaining stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
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Zacks.com featured highlights Lantheus, Skyline Champion, CTS and U.S. Silica
For Immediate Release
Chicago, IL – July 29, 2022 – Stocks in this week’s article are Lantheus Holdings (LNTH - Free Report) , Skyline Champion Corp. (SKY - Free Report) , CTS Corp. (CTS - Free Report) and U.S. Silica Holdings (SLCA - Free Report) .
4 Top-Ranked Liquid Stocks to Boost Portfolio Returns in 2022
Creating a portfolio that includes stocks with healthy liquidity levels is likely to favor investors seeking robust returns.
Liquidity measures a company's capability to meet short-term debt obligations. Stocks with high liquidity levels have always been in demand, owing to their potential to provide maximum returns.
One needs to exercise caution before investing in such stocks. High liquidity may indicate that the company is clearing its dues faster than its peers. However, it may also suggest that the company cannot deploy its assets competently.
Hence, an investor may consider a company's efficiency level in addition to its liquidity for identifying potential winners.
Measures to Identify Liquid Stocks
Current Ratio: It measures current assets relative to current liabilities. The ratio gauges a company's potential to meet short- and long-term debt obligations. A current ratio — also known as the working capital ratio — below 1 indicates that the company has more liabilities than assets. However, a high current ratio does not always suggest that the company is in good financial shape. It may also suggest that the firm failed to utilize its assets significantly. Hence, a range of 1-3 is considered ideal.
Quick Ratio: Unlike the current ratio, the quick ratio — also called the "acid-test ratio" or the "quick assets ratio" — reflects a company's ability to pay short-term obligations. It considers inventory excluding the current assets relative to current liabilities. Like the current ratio, a quick ratio of more than 1 is desirable.
Cash Ratio: This is the most conservative ratio among the three, considering cash and cash equivalents and invested funds relative to current liabilities. It measures a company's ability to meet current debt obligations using the most liquid assets. Though a cash ratio of more than 1 may suggest sound financials, a higher number may indicate inefficiency in cash utilization.
A ratio greater than 1 is always desirable but may not always represent a company's financial condition.
Here are four of the 12 stocks that qualified for the screen:
North Billerica, MA-based Lantheus Holdings is involved in developing, manufacturing, selling and distributing diagnostic medical imaging agents and products for diagnosing cardiovascular and other diseases. It serves hospitals, clinics, group practices, integrated delivery networks, group purchasing organizations, radio pharmacies and wholesalers. The Zacks Consensus Estimate for 2022 earnings moved up 1.3% to $3.08 per share in the past 60 days. Lantheus has a Growth Score of A and a trailing four-quarter earnings surprise of 77.8%, on average.
Troy, MI-based Skyline Champion Corp. designs, produces and distributes manufactured housing and recreational vehicles. The company has 42 manufacturing facilities across the United States and western Canada. The company also boasts a factory-direct retail business —Titan Factory Direct — and has 30 retail locations, mainly in the southern United States. It also has a transportation business — Star Fleet Trucking.
The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at $5.10 per share, up 6% in the past 60 days. Skyline has a Growth Score of A and a trailing four-quarter earnings surprise of 45.3%, on average.
Lisle, IL-based CTS Corp. manufactures sensors, actuators and electronic components and supplies these products to OEMs in the aerospace, communications, defense, industrial, information technology, medical and transportation markets. The company is expected to keep gaining from continued momentum across end markets. Disciplined capital allocation and strategic acquisitions bode well.
The TEWA Temperature Sensors acquisition has bolstered CTS' presence in Europe. The Zacks Consensus Estimate for 2022 earnings is pegged at $2.40 per share, up 11.6% in the past 60 days. CTS has a Growth Score of A.
Based in Katy, TX, U.S. Silica Holdings makes and markets commercial silica, a specialized mineral, to various attractive end markets in the United States. To serve a wide gamut of end markets, U.S. Silica makes and distributes a range of commercial silica products, including whole grain and ground products and other industrial mineral products that complement its commercial silica products.
Oil and gas proppants is the company's biggest end market. The Zacks Consensus Estimate for its 2022 earnings is pegged at 80 cents per share, up 5.3% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 41.8%, on average.
Get the remaining stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1959388/4-top-ranked-liquid-stocks-to-boost-portfolio-returns-in-2022
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.