Interested in gaining exposure to services companies? Company liquidity is an important consideration in any stock analysis. Liquidity gives a company the ability to make big acquisitions if it sees investment opportunities, a cushion for future lulls in demand, and most importantly, it keeps a company's doors open. Are these the types of stocks that you're looking for? Do you prefer high-growth stocks? You might be interested in 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 1-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 services stocks. We next screened for businesses that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We then screened for businesses with projected high growth, measured by 1-year projected EPS growth above 25%. We did not screen out any market caps.
Do you think these stocks will go up in valuation? Use our list to help with your own analysis.
1) Builders FirstSource, Inc. (BLDR)
|Industry:||Home Improvement Stores|
Builders FirstSource, Inc. has a Current Ratio of 3.42 and Quick Ratio of 2.56 and 1-Year Projected Earnings Per Share Growth Rate of 74.20%. The short interest was 3.69% as of 05/20/2012. Builders FirstSource, Inc. engages in the manufacture and supply of structural and related building products for residential new construction primarily in the southern and eastern United States. The company offers prefabricated components, including floor trusses, roof trusses, wall panels, stairs, and engineered wood; and window and door products, such as aluminum and vinyl windows, and pre-hung interior and exterior doors, as well as assembles and distributes interior and exterior door units. It also provides lumber and lumber sheet products comprising dimensional lumber, plywood, and oriented strand board products; millwork products, including interior trim, exterior trim, columns, and posts, as well as custom exterior featured products; and other building products, such as cabinets, gypsum, hardware, composite materials, roofing, and insulation.
2) Bristow Group, Inc. (BRS)
|Industry:||Air Services, Other|
Bristow Group, Inc. has a Current Ratio of 4.17 and Quick Ratio of 3.22 and 1-Year Projected Earnings Per Share Growth Rate of 34.27%. The short interest was 5.44% as of 05/20/2012. Bristow Group Inc., together with its subsidiaries, provides helicopter services to the offshore energy industry primarily in Europe, West Africa, North America, Australia, and internationally. Its helicopters are used principally to transport personnel between onshore bases and offshore platforms, drilling rigs, and installations, as well as to transport time-sensitive equipment to offshore locations. The company also offers helicopter flight training services to commercial pilots and flight instructors through its Bristow Academy with facilities in Titusville, Florida; Concord, California; New Iberia, Louisiana and Gloucestershire, England.
3) Seacor Holdings Inc. (CKH)
Seacor Holdings Inc. has a Current Ratio of 2.44 and Quick Ratio of 2.16 and 1-Year Projected Earnings Per Share Growth Rate of 55.34%. The short interest was 1.08% as of 05/20/2012. SEACOR Holdings Inc. owns, operates, invests in, and markets equipment primarily in offshore oil and gas, industrial aviation, and inland and coastal marine transportation industries worldwide. Its Offshore Marine Services segment operates support vessels to deliver cargo and personnel to offshore installations; handle anchors for drilling rigs and marine equipment; carry and launch remote operated vehicles; move personnel and supplies to offshore wind farms; support offshore construction and maintenance work; and provide accommodations for technicians and specialists, standby safety support, and emergency response services. This segment also offers shore bases, marine transport, and other supply chain management services; and supports well stimulation, seismic data gathering, and offshore accommodation projects.
4) China Direct Industries, Inc. (CDII)
China Direct Industries, Inc. has a Current Ratio of 2.74 and Quick Ratio of 2.06 and 1-Year Projected Earnings Per Share Growth Rate of 41.67%. The short interest was 0.82% as of 05/20/2012. CD International Enterprises, Inc. sources, produces, and distributes industrial products in the People's Republic of China and the Americas. The company operates in three segments: Magnesium, Basic Materials, and Consulting. The Magnesium segment produces, sells, and distributes pure magnesium ingots, magnesium powder and granules, and magnesium scraps.
5) Caribou Coffee Company, Inc. (CBOU)
Caribou Coffee Company, Inc. has a Current Ratio of 3.00 and Quick Ratio of 2.06 and 1-Year Projected Earnings Per Share Growth Rate of 30.61%. The short interest was 13.06% as of 05/20/2012. Caribou Coffee Company, Inc. owns and operates coffeehouses. The company operates in three segments: Retail, Commercial, and Franchise. The Retail segment offers premium coffee and espresso-based beverages, food, specialty teas, whole bean coffee, branded merchandise, and related products.
6) Essex Rental Corp. (ESSX)
|Industry:||Rental & Leasing Services|
Essex Rental Corp. has a Current Ratio of 2.31 and Quick Ratio of 2.08 and 1-Year Projected Earnings Per Share Growth Rate of 57.10%. The short interest was 3.52% as of 05/20/2012. Essex Rental Corp., through its subsidiaries, rents and distributes cranes primarily in the United States. It offers mobile cranes, including lattice-boom crawler cranes, truck cranes, and rough terrain cranes; self-erecting cranes; stationary tower cranes; elevators and hoists; and other lifting equipment used in various construction projects. The company also provides product support services consisting of installation, maintenance, repair, and parts and services for equipment provided and other equipment used by its construction industry customers.
*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.