For Immediate Release
Chicago, IL – June 27, 2022 – Stocks in this week’s article areQualys (
QLYS Quick Quote QLYS - Free Report) , Diodes ( DIOD Quick Quote DIOD - Free Report) , Southwest Airlines Co ( LUV Quick Quote LUV - Free Report) and Perion Network ( PERI Quick Quote PERI - Free Report) . Add These Top Ranked Liquid Stocks for Healthy Gains
Creating a portfolio with favorable liquidity stocks is likely to work in favor of investors seeking healthy returns.
Liquidity measures a company's capability to meet its 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 utilize 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, as it considers 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.
To pick the best of the lot, we have added asset utilization — a widely-used measure of a company's efficiency — as one of the screening criteria. Asset utilization is the ratio of total sales in the past 12 months to the last four-quarter average of total assets. Though this ratio varies across industries, companies with a ratio higher than their respective industries can be considered efficient.
To ensure that these liquid and efficient stocks have solid growth potential, we have added our proprietary Growth Style Score to the screen.
Here are four of the eight stocks that qualified for the screen:
Foster City, CA-based
Qualys offers cloud security and compliance solutions that aid business organizations to identify security risks to their IT infrastructures and protect their IT systems and applications from cyber-attacks. The company's solutions are provided through its QualysGuard Cloud Platform. Qualys is gaining from the higher demand for security and networking products amid the pandemic as a massive global workforce continues to work remotely.
Implementation of its hybrid work model and accelerated digital transformations by organizations are also fueling demand for the company's cloud-based security solutions. The Zacks Consensus Estimate for 2022 earnings has improved 8.6% to $3.15 per share in the past 60 days. Qualys has a Growth Score of A and a trailing four-quarter earnings surprise of 10%, on average.
Based in Plano, TX,
Diodes is a leading manufacturer and supplier of high-quality discrete and analog semiconductor products. The company caters to the communications, computing, industrial, consumer electronics and automotive markets. DIOD's two manufacturing facilities are in Shanghai, China, while it has a wafer fabrication plant in Kansas City.
Diodes' strong product portfolio is helping it capitalize on high-growth opportunity areas like smart infrastructure, smartphones, 5G, IoT, home automation, cloud computing, server, storage, data centers, connected cars, embedded systems and precision controls. The Zacks Consensus Estimate for 2022 earnings is pegged at $6.93 per share, up 7.8% in the past 60 days. Diodes has a Growth Score of B and a trailing four-quarter earnings surprise of 9.2%, on average.
Southwest Airlines Co is a passenger airline service in the United States. Continued recovery in air-travel demand bodes well for Southwest Airlines. Anticipating improved bookings, the carrier is well-positioned to reap profits in the remaining three quarters of 2022. Fleet- modernization efforts of LUV are encouraging as well. At the end of the first quarter of 2022, Southwest Airlines had 722 Boeing 737 jets in its fleet.
The carrier uses its fleet to serve 121 destinations across 11 countries (the United States and 10 near-international countries, including Dominican Republic, Mexico, Jamaica, The Bahamas, Aruba, Costa Rica, Belize, Cuba, the Cayman Islands and Caicos). The Zacks Consensus Estimate for 2022 earnings is pegged at $2.63 per share, up 119.2% in the past 60 days. LUV has a Growth Score of B and a trailing four-quarter earnings surprise of 33.5%, on average
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 $1.77 per share, up 50% in the past 60 days. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 34.7%, 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/1943423/add-these-4-top-ranked-liquid-stocks-for-healthy-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 >>.
Follow us on Twitter:
Join us on Facebook:
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.
Contact: Jim Giaquinto
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.
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.