Seeking Alpha
Long/short equity, deep value, value
Profile| Send Message|
( followers)  

The phrase “cash is king” will always have its place in the sun among investors but the fondness of the phrase doesn’t seem to be extended to some cash rich firms. Recently, we’ve noticed that some firms are sitting on a significant level of cash but have been pushed to 52-week lows. While some may argue these firms are over the hill (this could be true) we’d still like to point out these firms didn’t accumulate a high level of cash on hand and become large cap firms by just sitting around twiddling their thumbs. Therefore, we believe these names deserve another review to see if any hold some type of mispriced investment opportunity.

The current ratio is a liquidity ratio that let’s investors know how financially healthy a firm is. This metric tells investors how easily a firm can pay all of its current obligations through current assets should they all come due at once. If a firm has a current ratio below one this is a sign of potential trouble. On the other hand, if a firm has an extremely high current ratio this means the firm is likely sitting on a large pile of cash and cash equivalents.

We first looked for large cap stocks sitting on a large pile of cash (current ratio>2). We then narrowed the list by looking for large cap stocks that were also trading near their 52-week lows (X<30%). We did not filter out any sectors.

The list is ranked from highest to lowest by the current ratio:

1. Analog Devices Inc. (ADI)

Sector

Technology

Industry

Semiconductors

Market Cap

$10,519M

Beta

1.07

The firm designs and manufactures mixed-signal, analog, and digital signal processing integrated circuits. The company has a current ratio of 7.80. ADI is trading 20.18% below its 52-week high. The short interest was 3.00% as of 09/30/2011.

2. Altera Corp. (ALTR)

Sector

Technology

Industry

Semiconductors

Market Cap

$12,004M

Beta

1.11

The firm designs and sells programmable logic devices. The company has a current ratio of 6.69. ALTR is trading 29.64% above its 52-week high. The short interest was N/A as of 09/30/2011.

3. Franklin Resources. (BEN)

Sector

Financial Services

Industry

Asset Management

Market Cap

$22,832M

Beta

1.53

The firm offers nvestment management and related services to both retail and institutional clients. The company has a current ratio of 6.33. BEN is trading 18.0% above its 52-week high. The short interest was 2.80% as of 09/30/2011.

4. Boston Properties Inc. (BXP)

Sector

Real Estate

Industry

REIT - Office

Market Cap

$13,659M

Beta

1.51

The Company is a fully integrated, self-administered and self-managed real estate investment trust and an owner and developer of office properties in the U.S. Properties. The company has a current ratio of 6.23. BXP is trading 14.76% above its 52-week high. The short interest was 7.70% as of 09/30/2011.

5. Texas Instruments, Inc. (TXN)

Sector

Technology

Industry

Semiconductors

Market Cap

$35,191M

Beta

1.03

The firm builds and sells semiconductors, digital signal processors, and more. The company has a current ratio of 6.20. TXN is trading 25.14% above its 52-week high. The short interest was 2.70% as of 09/30/2011.

6. Infosys Ltd. (INFY)

Sector

Technology

Industry

Information Technology Services

Market Cap

$31,751M

Beta

1.00

The firm offers comprehensive end-to-end business solutions. The company has a current ratio of 6.05. INFY is trading 20.49 % above its 52-week high. The short interest was N/A as of 09/30/2011.

7. Google, Inc. (GOOG)

Sector

Technology

Industry

Internet Content & Information

Market Cap

$190,662M

Beta

0.86

The firm is the leading internet search provider and provides targeted advertising. The company has a current ratio of 5.96. GOOG is trading 24.83% above its 52-week high. The short interest was N/A as of 09/30/2011.

8. Amgen Inc. (AMGN)

Sector

Healthcare

Industry

Biotechnology

Market Cap

$54,143M

Beta

0.48

The firm develops and sells human therapeutics. The company has a current ratio of 5.56. AMGN is trading 22.93% above its 52-week high. The short interest was 2.10% as of 09/30/2011.

9. T. Rowe Price Group. (TROW)

Sector

Financial Services

Industry

Asset Management

Market Cap

$14,064M

Beta

1.77

The firm offers investment advisory services to individual and institutional investors. The company has a current ratio of 5.08. TROW is trading 22.78 % above its 52-week high. The short interest was 2.60% as of 09/30/2011.

10. Southern Copper Corporation. (SCCO)

Sector

Basic Materials

Industry

Copper

Market Cap

$23,588M

Beta

1.58

The firm is a producer of copper and other minerals. The company has a current ratio of 4.69. SCCO is trading 23.56% above its 52-week high. The short interest was N/A as of 09/30/2011.

We hope this list helps as investors do their own due diligence and research on large cap firms sitting on significant piles of cash that are far from their 52-week highs.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 10 Cash Rich Large Cap Stocks Trading Far From Their Highs