Small-cap stocks tend to offer investors greater growth opportunities than large-cap alternatives, although this comes with its fair share of added risk. Are you looking for small-caps? Do you prefer investing in stocks that analysts have weighed in on? Interested in companies with high liquidity? For ideas on how to start your own search, we ran a screen.
The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.
The Quick ratio measures a company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the Current Ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).
We first looked for small cap stocks. We next screened for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). We next screened for businesses with a large amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We did not screen out any sectors.
Do you think these small-cap stocks are undervalued and have room to trade higher? Use our screened list as a starting point for your own analysis.
1) ADTRAN Inc. (NASDAQ:ADTN)
ADTRAN Inc. has a Analysts' Rating of 2.40 and Current Ratio of 5.50 and Quick Ratio of 4.16. The short interest was 9.67% as of 05/06/2012. ADTRAN, Inc. designs, manufactures, markets, and services communications network solutions that enable voice, data, video, and Internet communications across wireline and wireless networks worldwide. Its Carrier Networks division provides fiber and copper-based solutions for service providers to deliver voice, data, and video services to customers' premises and mobile network cell sites. Its products enable services, such as voice, VoIP, IP television, RF video, high speed Internet access, and data services based upon Ethernet, frame relay, TDM, and ATM networks, connecting the network with user components, such as switches, routers, gateways, integrated access devices (IADs), private branch exchanges (PBXs), and telephone key systems.
2) Abaxis Inc. (NASDAQ:ABAX)
Abaxis Inc. has a Analysts' Rating of 2.10 and Current Ratio of 7.31 and Quick Ratio of 6.18. The short interest was 6.84% as of 05/06/2012. Abaxis, Inc. develops, manufactures, markets, and sells portable blood analysis systems for use in veterinary or human patient-care setting to provide blood constituent measurements for clinicians worldwide. The company offers point-of-care blood chemistry analyzer, which consists of a compact portable analyzer and a series of single-use plastic discs, called reagent discs, containing all the chemicals required to perform a panel of up to 14 tests on human patients and 13 tests on veterinary patients. It markets the blood analysis system under the Piccolo Xpress and Piccolo Classic names in the medical market; and under the VetScan VS2 and VetScan Classic names in the veterinary market.
3) Acorda Therapeutics, Inc. (NASDAQ:ACOR)
Acorda Therapeutics, Inc. has a Analysts' Rating of 2.50 and Current Ratio of 4.24 and Quick Ratio of 3.89. The short interest was 6.42% as of 05/06/2012. Acorda Therapeutics, Inc., a commercial-stage biopharmaceutical company, engages in the identification, development, and commercialization of novel therapies for multiple sclerosis (NYSE:MS), spinal cord injury (NYSE:SCI), and other central nervous system disorders primarily in the United States. Its marketed products include Ampyra (dalfampridine), a potassium channel blocker for improving walking in patients with MS; and Zanaflex Capsules and Zanaflex tablets (tizanidine hydrochloride), a short-acting drug for the management of spasticity. The company also markets products for the improvement of walking in adult patients with MS with walking disability under the Fampyra name internationally.
4) Aegion Corporation (NASDAQ:AEGN)
Aegion Corporation has a Analysts' Rating of 1.90 and Current Ratio of 2.97 and Quick Ratio of 2.66. The short interest was 10.11% as of 05/06/2012. Aegion Corporation provides proprietary technologies and services for the rehabilitation and strengthening of sewer, water, energy, and mining piping systems, as well as buildings, bridges, tunnels, and waterfront structures; and the corrosion protection of industrial pipelines in North America and internationally. The company's business activities include research and development, manufacturing, distribution, installation, coating and insulation, cathodic protection, and licensing. It offers Insituform CIPP Process for the rehabilitation of sewers, pipelines, and other conduits; iPlus Infusion Process for the rehabilitation of small-diameter sewer pipelines; iPlus Composite Process for the rehabilitation of large-diameter sewer pipelines; InsituMain System, a cured-in-place pipe solution for pressure pipes; InsituGuard, InsituFlex, and InsituFold Processes for rehabilitating transmission and distribution water mains; and Thermopipe Lining System, a polyester-reinforced polyethylene lining system for the rehabilitation of distribution water mains.
5) Akorn, Inc. (NASDAQ:AKRX)
|Industry:||Drugs - Generic|
Akorn, Inc. has a Analysts' Rating of 2.00 and Current Ratio of 5.51 and Quick Ratio of 4.26. The short interest was 16.14% as of 05/06/2012. Akorn, Inc. engages in the manufacture and marketing of diagnostic and therapeutic ophthalmic pharmaceuticals products, niche hospital drugs, and injectable pharmaceuticals in the United States and internationally. It offers products in various specialty areas, including ophthalmology, antidotes, anti-infectives, pain management, anesthesia, and vaccines. The company's Ophthalmic segment markets diagnostic products, including mydriatics and cycloplegics, anesthetics, topical stains, gonioscopic solutions, angiography dyes, and others primarily for use in the office setting.
6) Altra Holdings, Inc. (NASDAQ:AIMC)
|Industry:||Industrial Electrical Equipment|
Altra Holdings, Inc. has a Analysts' Rating of 1.60 and Current Ratio of 3.39 and Quick Ratio of 2.11. The short interest was 5.05% as of 05/06/2012. Altra Holdings, Inc., through its subsidiary, Altra Industrial Motion, Inc., designs, produces, and markets a range of mechanical power transmission and motion control products worldwide. The company provides industrial clutches and brakes for elevators, forklifts, lawn mowers, oil well draw works, punch presses, and conveyors; open and enclosed gearing products for conveyors, ethanol mixers, packaging machinery, and metal processing equipment; and engineered couplings for extruders, turbines, steel strip mills, and pumps.
*Company profiles were sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.