Are you looking for mid-sized companies that still have room to grow? Are you interested in gaining exposure to biotechnology companies and companies with high liquidity? Do you prefer stocks that analysts rate as 'Buy', or better? If so, here are some ideas to start your stock search.
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 mid-cap biotechnology stocks. Next, we then screened for businesses that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). Next, we then screened for businesses that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3).
Do you think these mid-cap stocks have more value to price in? Use our list along with your own analysis.
1) BioMarin Pharmaceutical Inc. (BMRN)
BioMarin Pharmaceutical Inc. has a Current Ratio of 4.28 and Quick Ratio of 3.25 and Analysts' Rating of 1.70. The short interest was 9.40% as of 05/12/2012. BioMarin Pharmaceutical Inc. develops and commercializes biopharmaceuticals for serious diseases and medical conditions in the United States, Europe, Latin America, and rest of the world. The company's commercial products include Naglazyme, a recombinant form of N-acetylgalactosamine 4-sulfatase enzyme used for the treatment of mucopolysaccharidosis [MPS] VI; Kuvan, a proprietary synthetic oral form of 6R-BH4 used to treat patients with phenylketonuria [PKU], a metabolic disease; Aldurazyme, used for the treatment of mucopolysaccharidosis I, a genetic disease; and Firdapse used to treat Lambert Eaton Myasthenic Syndrome, an autoimmune disease. It develops GALNS, an enzyme replacement therapy for the treatment of MPS IVA, a lysosomal storage disorder; PEG-PAL, an enzyme substitution therapy that is under Phase II clinical trial to treat PKU; BMN-673, a Phase I/II clinical trial product for the treatment of cancer; BMN-701, an enzyme replacement therapy, which is under Phase I/II clinical trials for Pompe disease, a glycogen storage disorder; and BMN-111, a peptide therapeutic that is under Phase I clinical trial for the treatment of achondroplasia.
2) Jazz Pharmaceuticals plc (JAZZ)
Jazz Pharmaceuticals plc has a Current Ratio of 3.77 and Quick Ratio of 3.69 and Analysts' Rating of 1.60. The short interest was 4.85% as of 05/12/2012. Jazz Pharmaceuticals Public Limited Company, a specialty biopharmaceutical company, focuses on the identification, development and commercialization of pharmaceutical products to meet unmet medical needs. Its marketed products include Xyrem, a sodium oxybate oral solution for the treatment of cataplexy and excessive daytime sleepiness in patients with narcolepsy; FazaClo (clozapine, USP) LD and FazaClo HD products, which are orally disintegrating clozapine tablets for the treatment of resistant schizophrenia; Luvox CR, extended-release capsules for the treatment of obsessive compulsive disorder; and Prialt, a non-opioid intrathecal analgesic for refractory severe chronic pain. The company also offers women's health and other products, such as Elestrin for moderate-to-severe vasomotor symptoms associated with menopause; Natelle and Gesticare prescription prenatal vitamins; Urelle for irritative voiding, as well as for inflammation, hypermotility, and pain that accompany lower urinary tract infections; Gastrocrom oral concentrate for mastocytosis; Parcopa for idiopathic Parkinson's disease; and AVC (sulfanilamide) cream to treat vulvovaginitis caused by Candida albicans, as well as Niravam for the management of anxiety disorder or the short-term relief of symptoms of anxiety, as well as for panic disorder with or without agoraphobia.
3) Seattle Genetics Inc. (SGEN)
Seattle Genetics Inc. has a Current Ratio of 4.38 and Quick Ratio of 4.28 and Analysts' Rating of 2.30. The short interest was 34.43% as of 05/12/2012. Seattle Genetics, Inc., a clinical stage biotechnology company, focuses on the development and commercialization of monoclonal antibody-based therapies for the treatment of cancer and autoimmune diseases in the United States. Its lead product, SGN-35 is in pivotal trial stage used for the treatment of patients with relapsed or refractory Hodgkin lymphoma. The company's other product candidates in various stages of clinical trials include SGN-75, which is in Phase I clinical trials for metastatic renal cell carcinoma and non-Hodgkin lymphoma; ASG-5ME, a preclinical antibody-drug conjugate product candidate for the treatment of solid tumors; dacetuzumab (SGN-40), a humanized anti-CD40 antibody; SGN-70, a humanized anti-CD70 antibody for the treatment of autoimmune diseases; and SGN-19A, a preclinical antibody-drug conjugate product candidate for the treatment of hematologic malignancies.
4) Questcor Pharmaceuticals, Inc. (QCOR)
Questcor Pharmaceuticals, Inc. has a Current Ratio of 4.28 and Quick Ratio of 4.20 and Analysts' Rating of 1.20. The short interest was 25.45% as of 05/12/2012. Questcor Pharmaceuticals, Inc., a biopharmaceutical company, provides prescription drugs for the treatment of multiple sclerosis, nephrotic syndrome, and infantile spasms indications. It primarily offers H.P.
5) Illumina Inc. (ILMN)
Illumina Inc. has a Current Ratio of 5.59 and Quick Ratio of 5.15 and Analysts' Rating of 2.40. The short interest was 17.75% as of 05/12/2012. Illumina, Inc. develops, manufactures, and markets life science tools and integrated systems for the analysis of genetic variation and biological function in North America, Europe, Latin America, the Asia-Pacific, the Middle East, and South Africa. Its sequencing platforms include HiSeq 2000, an instrument for high-throughput sequencing using sequencing-by-synthesis [SBS] technology; HiSeq 1000 that accommodates lower throughput needs; MiSeq, a personal sequencing system that offers sequencing applications in a compact and economical instrument for individual researchers; and Genome Analyzer IIx. The company's sequencing/array combination platforms comprise HiScanSQ that combines SBS technology and HiScan microarray analysis instrumentation into one system.
6) VIVUS Inc. (VVUS)
VIVUS Inc. has a Current Ratio of 13.83 and Quick Ratio of 13.55 and Analysts' Rating of 2.20. The short interest was 15.73% as of 05/12/2012. VIVUS, Inc., a biopharmaceutical company, is developing therapies to address obesity, sleep apnea, diabetes, and male sexual health. Its lead investigational product, Qnexa, has completed Phase 3 clinical trials for the treatment of obesity. Qnexa is also in Phase 2 clinical development for the treatment of type 2 diabetes and obstructive sleep apnea.
*Company profiles were sourced from Finviz. Financial data was sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.