Interested in biotechnology companies? Do you value companies holding large amounts of cash? Do you prefer stocks with high projected earnings over the next year? If so, you'll probably like this list.
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).
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The One-Year Expected EPS Growth Rate is an annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
We first looked for biotechnology stocks. We then looked for businesses that have a substantial amount of cash on hand (Current Ratio > 2)(Quick Ratio > 2). We then looked for companies that have high future earnings per share growth forecasts(One-Year Projected EPS Growth Rate > 25%). We did not screen out any market caps.
Do you think these stocks are in strong positions for future growth? Use our list to help with your own analysis.
1. Cornerstone Therapeutics (CRTX)
Cornerstone Therapeutics Inc. has a Current Ratio of 2.20, a Quick Ratio of 2.01, and a One-Year Projected Earnings Per Share Growth Rate of 281.82%. The short interest was 1.02% as of May 15, 2012. Cornerstone Therapeutics, a specialty pharmaceutical company, engages in the acquisition, development, and commercialization of prescription pharmaceutical drugs for the hospital, niche respiratory, and related specialty markets. The company offers Curosurf, a natural lung surfactant used for the treatment of respiratory distress syndrome in premature infants; and Zyflo CR and Zyflo, which are leukotriene synthesis inhibitor drugs used for the prevention and chronic treatment of asthma in adults and children. The company's product pipeline also includes CRTX 080, a vasopressin receptor 2 antagonist lixivaptan used for the treatment of hyponatremia; CRTX 073, an anti-asthma product candidate used for the treatment of asthma; and CRTX 067, a cough/cold product candidate for the treatment of cough and cold.
2. Alexion Pharmaceuticals (ALXN)
Alexion Pharmaceuticals has a Current Ratio of 2.30, a Quick Ratio of 2.03, and a One-Year Projected Earnings Per Share Growth Rate of 41.90%. The short interest was 1.62% as of May 15, 2012. Alexion Pharmaceuticals, a biopharmaceutical company, engages in the innovation, development, and commercialization of life-transforming therapeutic products for treating patients with severe and ultra-rare disorders in the United States, Europe, Latin America, Japan, and the Asia Pacific. It focuses on developing products for the treatment of diseases in the areas of hematology, nephrology, neurology, metabolic disorders, oncology, and ophthalmology. The company offers Soliris (eculizumab), a therapeutic product for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), a blood disorder; and atypical hemolytic uremic syndrome (aHUS), an ultra-rare and life-threatening genetic disease.
3. Anika Therapeutics (ANIK)
Anika Therapeutics has a Current Ratio of 4.97, a Quick Ratio of 4.26, and a One-Year Projected Earnings Per Share Growth Rate of 27.27%. The short interest was 0.65% as of May 15, 2012. Anika Therapeutics, together with its subsidiaries, develops, manufactures, and commercializes therapeutic products for tissue protection, healing, and repair. Its products are based on hyaluronic acid (HA), a naturally occurring biocompatible polymer found in the body. The company offers orthobiologics products for providing relief from the pain of osteoarthritis, and regenerating damaged tissue, such as cartilage defects; Orthovisc for the treatment of osteoarthritis of the knee and various joints; Orthovisc mini for the treatment of osteoarthritis in small joints; and Monovisc, a single injection product used for the treatment of osteoarthritis in various joints.
4. Cadence Pharmaceuticals (CADX)
Cadence Pharmaceuticals has a Current Ratio of 5.48, a Quick Ratio of 5.36, and One-Year Projected Earnings Per Share Growth Rate of 62.20%. The short interest was 13.02% as of May 15, 2012. Cadence Pharmaceuticals, a biopharmaceutical company, focuses on acquiring, in-licensing, developing, and commercializing proprietary product candidates principally for use in the hospital setting in the United States and Canada. It holds rights to Ofirmev injection, a proprietary intravenous formulation of acetaminophen for the management of pain and reduction of fever in adults and children. The company in-licenses rights to Ofirmev from Bristol-Myers Squibb, which sells intravenous acetaminophen in Europe and other markets for the treatment of acute pain and fever under the Perfalgan brand name.
5. BioMarin Pharmaceutical (BMRN)
BioMarin Pharmaceutical has a Current Ratio of 4.28, a Quick Ratio of 3.25, and a One-Year Projected Earnings Per Share Growth Rate of 47.30%. The short interest was 9.60% as of May 15, 2012. BioMarin Pharmaceutical 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.
6. Acorda Therapeutics (ACOR)
Acorda Therapeutics has a Current Ratio of 4.24, a Quick Ratio of 3.89, and a One-Year Projected Earnings Per Share Growth Rate of 96.15%. The short interest was 5.66% as of May 15, 2012. Acorda Therapeutics, a commercial-stage biopharmaceutical company, engages in the identification, development, and commercialization of novel therapies for multiple sclerosis (MS), spinal cord injury (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.
Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.