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Snap Up These 4 Top-Ranked Liquid Stocks for Solid Gains
Investors looking for high returns will likely benefit from adding stocks with robust liquidity levels as liquidity supports business growth.
Liquidity primarily determines a company's capability to meet debt obligations by converting assets into liquid cash and equivalents. These stocks have always been on investors' radar, owing to their potential to provide strong returns.
Investors should be alert before considering such stocks. While a high liquidity level may imply that the company is clearing its dues faster than its peers, it may also suggest that it cannot utilize its assets competently.
Hence, one may consider a company's efficiency level along with its liquidity to identify 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 13 stocks that qualified for the screen:
San Jose, CA-based Cadence Design Systems offers products and tools that help customers design electronic products. Cadence's core electronic design automation or EDA software and services enable engineers to develop different types of integrated circuits. Cadence's performance is being driven by strength across all segments owing to healthy demand for the company's diversified product portfolio. Frequent product launches and synergies from acquisitions are expected to help the company sustain top-line growth.
The company's Palladium and Protium platform is gaining traction among clients in the hyperscale, AI/ML and server customers. The Zacks Consensus Estimate for 2022 earnings is pegged at $4.11 per share, up 5.6% in the past 60 days. CDNS has a Growth Score of B and a trailing four-quarter earnings surprise of 9.8%, on average.
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. It has a trailing four-quarter earnings surprise of 54.6%, on average.
Based in Phoenix, AZ, Cavco Industries designs and manufactures factory-built housing structures. The company's products are sold under brands like Cavco Homes, Palm Harbor Homes, Friendship Homes, Fleetwood Homes, Fairmont Homes and Chariot Eagle. Cavco Industries is one of the prominent producers of park model RVs, vacation cabins and modular homes. The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at $24.05 per share, up 29.2% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 50.4%, on average.
Israel-based Perion Network is a technology company that offers online advertising and search monetization solutions to brands and publishers. The company is committed to providing data-driven execution, from high-impact ad formats to branded search and a unified social and mobile programmatic platform. The Zacks Consensus Estimate for its 2022 earnings is pegged at $1.87 per share, up 5.6% in the past 60 days. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 39.4%, 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/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
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Zacks.com featured highlights include Cadence Design Systems, Lantheus Holdings, Cavco Industries and Perion Network
For Immediate Release
Chicago, IL – August 15, 2022 – Stocks in this week’s article are Cadence Design Systems (CDNS - Free Report) , Lantheus Holdings (LNTH - Free Report) , Cavco Industries (CVCO - Free Report) and Perion Network (PERI - Free Report) .
Snap Up These 4 Top-Ranked Liquid Stocks for Solid Gains
Investors looking for high returns will likely benefit from adding stocks with robust liquidity levels as liquidity supports business growth.
Liquidity primarily determines a company's capability to meet debt obligations by converting assets into liquid cash and equivalents. These stocks have always been on investors' radar, owing to their potential to provide strong returns.
Investors should be alert before considering such stocks. While a high liquidity level may imply that the company is clearing its dues faster than its peers, it may also suggest that it cannot utilize its assets competently.
Hence, one may consider a company's efficiency level along with its liquidity to identify 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 13 stocks that qualified for the screen:
San Jose, CA-based Cadence Design Systems offers products and tools that help customers design electronic products. Cadence's core electronic design automation or EDA software and services enable engineers to develop different types of integrated circuits. Cadence's performance is being driven by strength across all segments owing to healthy demand for the company's diversified product portfolio. Frequent product launches and synergies from acquisitions are expected to help the company sustain top-line growth.
The company's Palladium and Protium platform is gaining traction among clients in the hyperscale, AI/ML and server customers. The Zacks Consensus Estimate for 2022 earnings is pegged at $4.11 per share, up 5.6% in the past 60 days. CDNS has a Growth Score of B and a trailing four-quarter earnings surprise of 9.8%, on average.
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. It has a trailing four-quarter earnings surprise of 54.6%, on average.
Based in Phoenix, AZ, Cavco Industries designs and manufactures factory-built housing structures. The company's products are sold under brands like Cavco Homes, Palm Harbor Homes, Friendship Homes, Fleetwood Homes, Fairmont Homes and Chariot Eagle. Cavco Industries is one of the prominent producers of park model RVs, vacation cabins and modular homes. The Zacks Consensus Estimate for fiscal 2023 earnings is pegged at $24.05 per share, up 29.2% in the past 60 days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 50.4%, on average.
Israel-based Perion Network is a technology company that offers online advertising and search monetization solutions to brands and publishers. The company is committed to providing data-driven execution, from high-impact ad formats to branded search and a unified social and mobile programmatic platform. The Zacks Consensus Estimate for its 2022 earnings is pegged at $1.87 per share, up 5.6% in the past 60 days. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 39.4%, 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/1967628/snap-up-these-4-top-ranked-liquid-stocks-for-solid-gains
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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Company: Zacks.com
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Email: pr@zacks.com
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/performancefor information about the performance numbers displayed in this press release.