The market can spin around at the speed of light and make some investors sick but we’re keeping cool because we understand what it means to have faith in one’s work. What do we mean by that? Simply stated, it pays to truly understand & buy quality companies that illustrate the “right” fundamentals. Of course every investor has different criteria on what makes up the “right” fundamentals but at a high level we think every investor can agree that strong growth over the last year and a sound level of liquidity is always a positive.
The Current Ratio is a liquidity Ratio that measures a firm’s ability to pay off short-term liabilities with short-term assets. The higher this number the better. As well, a general rule of thumb is that if a company has a Current Ratio of less than 1 then technically it cannot pay off its short-term obligations if they all came due at once. Having a Current Ratio of less than 1 is considered a red flag relative to the topic of liquidity and deserves further attention to get a better idea of what the situation actually is.
We started off by screening for large cap companies that had illustrated strong top line growth over the last year (1-Year Revenue Growth>15%) despite global turmoil. From this pool we then screen for companies that had a Current Ratio of at least 2. We did not screen out any sectors.
The list is ranked from lowest to highest in relation to the Current Ratio:
1. Petroleo Brasileiro SA Petrobras (PBR)
Sector | Energy |
Industry | Oil & Gas Integrated |
Market Cap | $ 184,580M |
Beta | 1.07 |
Analyst Sentiment | 11/18 -List Buy/Outperform (Bullish) |
The company is the preeminent leader in Brazilian oil exploration, production, and distribution. The firm’s 1-Year Revenue Growth is 30.68%. PBR’s Current Ratio is 2.01. The short interest is NA.
2. Vale S.A. (VALE)
Sector | Basic Materials |
Industry | Industrial Metals & Minerals |
Market Cap | $ 138,545M |
Beta | 1.49 |
Analyst Sentiment | 19/23– List Buy/ Outperform (Bullish) |
The company is a leading producer of iron ore and pellets with operations in roughly 21 countries. The firm’s 1-Year Revenue Growth is 94.30%. VALE’s Current Ratio is 2.03. The short interest is N/A.
3. Novo Nordisk A/S (NVO)
Sector | Healthcare |
Industry | Drug Manufacturers - Major |
Market Cap | $ 62,988M |
Beta | 0.48 |
Analyst Sentiment | 15/35 – List Buy/Outperform (Neutral) |
The company develops and sells pharmaceutical products. The primary focus is in diabetes care and biopharmaceuticals. The firm’s 1-Year Revenue Growth is 18.99%. NVO’s Current Ratio is 2.04. The short interest is N/A.
4. Research in Motion Ltd (RIMM)
Sector | Technology |
Industry | Communication Equipment |
Market Cap | $ 12,872M |
Beta | 1.92 |
Analyst Sentiment | 31/54 -List Hold/Neutral (Neutral) |
The company is best known for being the maker of BlackBerry but also offers software, wireless hardware, and services. The firm’s 1-Year Revenue Growth is 33.13%. RIMM’s Return on Equity (TTM) is 2.04. The short interest is N/A.
5. Merck & Co Inc (MRK)
Sector | Healthcare |
Industry | Drug Manufacturers - Major |
Market Cap | $ 96,552M |
Beta | 0.59 |
Analyst Sentiment | 17/23 -List Buy/Outperform (Bullish) |
The company develops and markets a variety of products for animal and human health. The firm’s 1-Year Revenue Growth is 67.66%. MRK’s Current Ratio is 2.05. The short interest is N/A.
6. Priceline.com, Inc. (PCLN)
Sector | Consumer Cyclical |
Industry | Leisure |
Market Cap | $ 25,040M |
Beta | 1.14 |
Analyst Sentiment | 14/19 -List Buy/Outperform (Bullish) |
The company is the operator of priceline.com, which is a popular travel booking website. The firm’s 1-Year Revenue Growth is 31.93% PCLN’s Current Ratio is 2.11. The short interest is 6.40% as of 07/29/2011.
7. AngloGold Ashanti Limited (AU)
Sector | Basic Materials |
Industry | Gold |
Market Cap | $ 16,721M |
Beta | 0.66 |
Analyst Sentiment | 6/11 – List Hold / Neutral (Neutral) |
The Company is a gold miner with gold operations in North America, South America, Australia, and Africa. The Company also produces uranium oxide and sulphuric acid. The firm’s 1-Year Revenue Growth is 36.62%. AU’s Current Ratio is 2.17. Short is NA.
8. 3M Co (MMM)
Sector | Industrials |
Industry | Diversified Industrials |
Market Cap | $ 58,565M |
Beta | 0.84 |
Analyst Sentiment | 12/19 – List Buy / Outperform (Bullish) |
More than just Post-it Notes and Scotch tape, 3M operates in areas that include healthcare, industrial, and transportation. The firm’s 1-Year Revenue Growth is 15.31%. MMM’s Current Ratio is 2.18. The short interest is 1.20% as of 07/29/2011.
9. Check Point Software Technology (CHKP)
Sector | Technology |
Industry | Software - Application |
Market Cap | $ 11,477M |
Beta | 0.58 |
Analyst Sentiment | 14/25 – List Hold / Neutral (Neutral) |
The Company develops, markets and supports a range of software and combined hardware and software products and services for IT security, and offers its customers a portfolio of network security, data security and management solutions. The firm’s 1-Year Revenue Growth is 18.76%. Current Ratio is 2.20. The short interest is 1.70% as of 07/29/2011.
10. Intel Corp (INTC)
Sector | Technology |
Industry | Semiconductors |
Market Cap | $ 108,433M |
Beta | 1.07 |
Analyst Sentiment | 30/51 -List Buy/Outperform (Bullish) |
The company develops advanced integrated digital technology platforms for multiple industries. The firm’s 1-Year Revenue Growth is 24.19%. INTL’s Current Ratio is 2.23. The short interest is 1.90% as of 07/29/2011.
We hope this list assists investors as they do their own due diligence on companies with sound liquidity and strong top line growth.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
