14 Takeover/LBO Targets With Positive Receivable Trends

|
 |  Includes: ABMD, ANTM, BIIB, CA, CERN, CRUS, IM, JBL, JWN, MOLX, RRC, RSH, TAP, XRX
by: Kapitall

Accounts receivable is a big part of revenue for many companies, but it is also a potential source of problems. Receivables represent money earned but not yet collected, so when receivables become a larger part of the revenue reported by a company, it indicates lower quality revenues. This is because there is no guarantee that the money will be paid back in full. In the same way, decreasing receivables relative to revenue growth is seen as a sign of strong revenues. We compiled a list of takeover/leveraged buyout [LBO] targets from various sources including CNBC and iStockAnalyst, then we screened these stocks for those that have seen positive trends in their accounts receivable: increases in quarterly revenue year-over-year outpacing changes in quarterly accounts receivable. We also screened for companies that have seen a decrease in accounts receivable as a percent of current assets year-over-year. ‪


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recentperformance, click here.

Do you think these companies are likely takeover candidates? Use this list as a starting point for your own analysis. List sorted by difference between growth in revenue and accounts receivable.

1. Range Resources Corporation (NYSE:RRC): Engages in the acquisition, exploration and development of natural gas properties primarily in the Appalachian and southwestern regions of the United States. Market cap of $10.91B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 73.29% ($338.2M vs. $195.16M y/y) while MRQ accounts receivable has decreased 11.71% ($86.17M vs. $97.6M y/y). Accounts receivable/current assets has decreased from 35.24% to 29.64%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock has gained 56.32% over the last year.

2. Jabil Circuit Inc. (NYSE:JBL): Provides electronic manufacturing services and solutions in the Americas, Europe and Asia. Market cap of $4.26B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 10.86% ($4,280.3M vs. $3,860.93M y/y) while MRQ accounts receivable has decreased 21.41% ($1,134.78M vs. $1,443.88M y/y). Accounts receivable/current assets has decreased from 31.02% to 22.10%, comparing 3 months ending 2011-08-31 to 3 months ending 2010-08-31. The stock has gained 41.96% over the last year.

3. CA Technologies (NASDAQ:CA): Designs, develops, markets, delivers, licenses and supports information technology [IT] management software products that operate on a range of hardware platforms and operating systems. Market cap of $9.90B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 10.29% ($1,200M vs. $1,088M y/y) while MRQ accounts receivable has decreased 13.77% ($601M vs. $697M y/y). Accounts receivable/current assets has decreased from 19.07% to 18.70%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. It's been a rough couple of days for the stock, losing 6.13% over the last week.

4. Abiomed Inc. (NASDAQ:ABMD): Engages in the research, development and sale of medical devices that provide circulatory support to acute heart failure patients across the continuum of care in heart recovery. Market cap of $686.16M. Takeover/LBO rumor sourced from CNBC. MRQ revenue has increased 26.09% ($29.48M vs. $23.38M y/y) while MRQ accounts receivable has increased 3.34% ($15.49M vs. $14.99M y/y). Accounts receivable/current assets has decreased from 19.38% to 17.82%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock is a short squeeze candidate, with a short float at 5.9% (equivalent to 8.32 days of average volume). The stock has had a good month, gaining 52.05%.

5. AMERIGROUP Corporation (AGP): Operates as a multi-state managed healthcare company. Market cap of $2.58B. Takeover/LBO rumor sourced from iStockAnalyst. MRQ revenue has increased 7.34% ($1,604.65M vs. $1,494.9M y/y) while MRQ accounts receivable has decreased 8.89% ($163.78M vs. $179.76M y/y). Accounts receivable/current assets has decreased from 18.56% to 15.54%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. It's been a rough couple of days for the stock, losing 6.59% over the last week. The stock has had a good month, gaining 20.23%.

6. Molson Coors Brewing Company (NYSE:TAP): Distributes beer brands. Market cap of $7.02B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 9.07% ($954.4M vs. $875M y/y) while MRQ accounts receivable has decreased 6.97% ($723.7M vs. $777.9M y/y). Accounts receivable/current assets has decreased from 41.87% to 36.23%, comparing 13 weeks ending 2011-09-24 to 13 weeks ending 2010-09-25. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.3%, current ratio at 1.55, and quick ratio at 1.4. The stock has lost 18.79% over the last year.

7. Nordstrom Inc. (NYSE:JWN): A fashion specialty retailer, offers apparel, shoes, cosmetics and accessories for women, men and children in the United States. Market cap of $9.85B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 13.57% ($2,478M vs. $2,182M y/y) while MRQ accounts receivable has decreased 0.99% ($1,995M vs. $2,015M y/y). Accounts receivable/current assets has decreased from 42.64% to 37.49%, comparing 13 weeks ending 2011-10-29 to 13 weeks ending 2010-10-30. It's been a rough couple of days for the stock, losing 5.66% over the last week.

8. Biogen Idec Inc. (NASDAQ:BIIB): Develops, manufactures and markets therapeutics in the areas of neurology, immunology, hemophilia and oncology in the United States and internationally. Market cap of $26.21B. Takeover/LBO rumor sourced from Minyanville. MRQ revenue has increased 11.41% ($1,309.93M vs. $1,175.79M y/y) while MRQ accounts receivable has decreased 0.62% ($833.13M vs. $838.32M y/y). Accounts receivable/current assets has decreased from 39.34% to 29.36%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. It's been a rough couple of days for the stock, losing 5.31% over the last week.

9. Cirrus Logic Inc. (NASDAQ:CRUS): Develops high-precision analog and mixed-signal integrated circuits (ICs). Market cap of $984.52M. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 0.99% ($101.6M vs. $100.6M y/y) while MRQ accounts receivable has decreased 7.33% ($44.9M vs. $48.45M y/y). Accounts receivable/current assets has decreased from 16.66% to 16.13%, comparing 3 months ending 2011-09-24 to 3 months ending 2010-09-25. It's been a rough couple of days for the stock, losing 6.61% over the last week.

10. Xerox Corp. (NYSE:XRX): Engages in the development, manufacture, marketing, service and finance of document equipment, software, solutions and services worldwide. Market cap of $10.79B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 2.86% ($5,583M vs. $5,428M y/y) while MRQ accounts receivable has decreased 5.08% ($5,349M vs. $5,635M y/y). Accounts receivable/current assets has decreased from 63.34% to 63.07%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. Might be undervalued at current levels, with a PEG ratio at 0.64, and P/FCF ratio at 9.09. The stock has lost 32.41% over the last year.

11. RadioShack Corp. (NYSE:RSH): Engages in the retail sale of consumer electronic goods and services through its RadioShack store chain and kiosk operations. Market cap of $1.16B. Takeover/LBO rumor sourced from CNN Money. MRQ revenue has increased 2.97% ($1,031.8M vs. $1,002M y/y) while MRQ accounts receivable has decreased 3.10% ($250.3M vs. $258.3M y/y). Accounts receivable/current assets has decreased from 13.95% to 13.79%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 4.29%, current ratio at 2.82, and quick ratio at 1.59. It's been a rough couple of days for the stock, losing 10.73% over the last week.

12. Cerner Corporation (NASDAQ:CERN): Designs, develops, markets, installs, hosts and supports healthcare information technology, healthcare devices and content solutions for healthcare organizations and consumers worldwide. Market cap of $9.68B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 23.55% ($571.64M vs. $462.68M y/y) while MRQ accounts receivable has increased 18.27% ($548.05M vs. $463.37M y/y). Accounts receivable/current assets has decreased from 40.73% to 38.51%, comparing 13 weeks ending 2011-10-01 to 13 weeks ending 2010-10-02. The stock is a short squeeze candidate, with a short float at 8.59% (equivalent to 7.22 days of average volume). It's been a rough couple of days for the stock, losing 10.74% over the last week.

13. Molex Inc. (NASDAQ:MOLX): Manufactures and sells electronic components worldwide. Market cap of $4.09B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 4.27% ($935.99M vs. $897.67M y/y) while MRQ accounts receivable has decreased 0.92% ($782.83M vs. $790.1M y/y). Accounts receivable/current assets has decreased from 42.68% to 37.79%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.44%, current ratio at 2.24, and quick ratio at 1.64. The stock has gained 16.08% over the last year.

14. Ingram Micro Inc. (NYSE:IM): Distributes information technology [IT] products and supply chain solutions worldwide. Market cap of $2.76B. Takeover/LBO rumor sourced from Seeking Alpha. MRQ revenue has increased 5.31% ($8,903.02M vs. $8,453.83M y/y) while MRQ accounts receivable has increased 1.63% ($3,735.53M vs. $3,675.48M y/y). Accounts receivable/current assets has decreased from 45.87% to 45.79%, comparing 13 weeks ending 2011-10-01 to 13 weeks ending 2010-10-02. The stock has gained 0.06% over the last year.

*Accounting data sourced from Google Finance, all other data sourced from Finviz. To access the complete list of takeover targets, click here.

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