Liquidity measures a company’s capability to meet short-term debt obligations. Investors seeking strong portfolio returns should benefit from adding stocks with sound liquidity, which encourages business growth. Stocks with high liquidity levels have always been in demand, owing to their potential to provide maximum returns.

Investors may want to consider adding four top-ranked stocks — Alignment Healthcare, Inc. (ALHC Quick QuoteALHC - Free Report) , Argan, Inc. (AGX Quick QuoteAGX - Free Report) , Ciena Corporation (CIEN Quick QuoteCIEN - Free Report) and Silicon Motion Technology Corporation (SIMO Quick QuoteSIMO - Free Report) — to their portfolios to boost returns.

However, it is important to exercise caution. While high liquidity can indicate that a company is efficiently managing its short-term obligations, it may also suggest underutilization of resources. In some cases, companies with excess liquidity may not be deploying their assets effectively, which could limit growth potential.

Hence, one may consider a company’s efficiency level in addition to its liquidity while identifying prospective winners. A balanced assessment of both liquidity and efficiency can help identify truly promising investment opportunities.

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 — the working capital ratio — below 1 indicates that the company has more liabilities than assets. A high current ratio does not always suggest that the company is in good financial shape. It may also indicate 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 — the “acid-test ratio” or “quick assets ratio” — indicates a company’s ability to pay short-term obligations. It considers inventory, excluding current assets, relative to current liabilities. A quick ratio of more than 1 is desirable, like the current ratio.

Cash Ratio: This is the most conservative ratio among the three, considering cash, cash equivalents and invested funds relative to current liabilities. It measures a company’s ability to meet existing 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 it may not always represent a company’s financial condition.

Screening Parameters

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 that of their industry can be considered efficient.

We added our proprietary Growth Score to the screen to ensure these liquid and efficient stocks have solid growth potential.

Current Ratio, Quick Ratio, and Cash Ratio between 1 and 3: While liquidity ratios greater than 1 are desirable, significantly high ratios may indicate inefficiency.

Asset utilization is more significant than the industry average: A higher asset utilization than the industry average indicates a company’s efficiency.

Zacks Rank equal to #1 (Strong Buy): Only Strong Buy-rated stocks can get through. You can see the complete list of today’s Zacks #1 Rank stocks here.

Growth Score less than or equal to B: Back-tested results show that stocks with a Growth Score of A or B handily beat other stocks when combined with a Zacks Rank #1 or 2 (Buy).

These criteria have narrowed the universe of more than 7,700 stocks to only five.

Here are four of the five stocks that qualified the screen:

Alignment Healthcare is a clinically focused platform designed to improve the healthcare experience for seniors registered under Medicare. Through its various Medicare Advantage plans, it caters to the various requirements and preferences of seniors.

The company recently reported first-quarter 2026 results, wherein revenues came in at $1.24 billion, up 33.3% year over year. Performance was driven by strength and execution across sales, clinical operations and member retention. At quarter-end, health plan membership was 284,800, up 30.9% from the prior year quarter. 

Profitability numbers were also impressive, with adjusted EBITDA up 87.6% year over year to $37.9 million.  2026 revenues are now expected to be between $5.16 billion and $5.21 billion.

The Zacks Consensus Estimate for ALHC’s 2026 earnings stands at 15 cents per share, up 2 cents in the past seven days. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 198.81%, on average.

Argan offers comprehensive construction and related services to the power industry through its Gemma Power Systems and Atlantic Projects company operations.

Driven by a strong demand backdrop, AGX reported fiscal 2026 revenues of $944.6 million, up 8.1% year over year. It ended the year with a backlog of $2.9 billion, after adding $2.5 billion in new contract value. Demand for its services is being driven by growth in AI and data centers and the replacement of aging power infrastructure.

The company is also maintaining a strong capital allocation strategy and returned $43 million to shareholders in fiscal 2026.

The Zacks Consensus Estimate for AGX’s fiscal 2027 earnings stands at $11.44 per share, unchanged in the past seven days. The company has a Growth Score of A.

Ciena, headquartered in Hanover, MD, is a leading provider of optical networking equipment, software and services.

Driven by accelerating AI-led demand from cloud and service provider customers, Ciena’s top line in the first quarter of 2026 improved 33% year over year, the bottom line grew 111%, and order backlog was a record $7 million. Ciena continues to capitalize on WAN connectivity needs across subsea, long-haul, metro networks and DCI.

Better pricing, Hyper-Rail innovation and cost optimization are expected to boost gross margins, going ahead. For fiscal 2026, adjusted gross margins are projected at 43.5-44.5%. With the first half exceeding expectations and supply challenges being managed, Ciena now expects first and second-half gross margins to be roughly similar. It is managing supply conditions effectively and expanding capacity, but demand is expected to exceed supply for the next several quarters.For the second quarter, Ciena expects revenues of $1.5 billion (+/-$50 million).

The Zacks Consensus Estimate for CIEN’s fiscal 2026 earnings is pegged at $6.16 per share, up one cent in the past seven days. The company has a Growth Score of A and a trailing four-quarter earnings surprise of 11.6%, on average.

Silicon Motion Technology is a leading developer of microcontroller ICs for NAND flash storage devices.

The company recently reported first-quarter 2026 results, wherein revenues came in at $342.1 million, up 23% sequentially and 105% year over year. The strong performance was buoyed by growth in embedded eMMC and UFS controllers as well as sharp acceleration in Ferri and boot drive offerings, highlighting expanding traction in enterprise and AI-related markets.

Given strong top-line expansion, non-GAAP operating income climbed sharply to $62.2 million from $14.9 million in the prior year quarter, with operating margin expanding to 18.2% from 8.9%. Increasing exposure to new enterprise/AI opportunities is likely to sustain long-term growth.

The Zacks Consensus Estimate for SIMO’s 2026 earnings is pegged at $7.81 per share, up from $5.78 in the past seven days. The company has a Growth Score of B and a trailing four-quarter earnings surprise of 18.61%, on average.