5 Cash Hoarding Small Cap Healthcare Stocks With Analyst Love

by: ZetaKap

Interested in healthcare stocks? 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 investing in stocks that analysts rate as 'strong buy'? If so, here are some interesting ideas for you.

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 healthcare stocks. We next screened for businesses that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We next screened for businesses that analysts rate as "Strong Buy" (mean recommendation < 2).

Do you think these stocks should be trading higher? Use our list along with your own analysis.

1) Anika Therapeutics Inc. (NASDAQ:ANIK)

Sector: Healthcare
Industry: Biotechnology
Market Cap: $187.55M
Beta: 1.44

Anika Therapeutics Inc. has a Current Ratio of 4.97 and Quick Ratio of 4.26 and Analysts' Rating of 1.00. The short interest was 1.60% as of 05/27/2012. Anika Therapeutics, Inc., 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.

2) Cornerstone Therapeutics Inc. (NASDAQ:CRTX)

Sector: Healthcare
Industry: Biotechnology
Market Cap: $132.35M
Beta: -0.66

Cornerstone Therapeutics Inc. has a Current Ratio of 2.65 and Quick Ratio of 2.42 and Analysts' Rating of 1.50. The short interest was 3.02% as of 05/27/2012. Cornerstone Therapeutics Inc., 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.

3) BioTime, Inc. (NYSEMKT:BTX)

Sector: Healthcare
Industry: Biotechnology
Market Cap: $211.93M
Beta: 1.00

BioTime, Inc. has a Current Ratio of 9.49 and Quick Ratio of 9.46 and Analysts' Rating of 1.00. The short interest was 15.95% as of 05/27/2012. BioTime, Inc., a biotechnology company, focuses on regenerative medicine and blood plasma volume expanders. It primarily focuses on regenerative medicine, which refers to therapies based on human embryonic stem (HES) cell and induced pluripotent stem (IPS) cell technology designed to rebuild cell and tissue function lost due to degenerative disease or injury. The company develops and markets research products in the field of stem cells and regenerative medicine.

4) Cynosure, Inc. (NASDAQ:CYNO)

Sector: Healthcare
Industry: Medical Appliances & Equipment
Market Cap: $249.35M
Beta: 1.98

Cynosure, Inc. has a Current Ratio of 3.48 and Quick Ratio of 2.61 and Analysts' Rating of 1.40. The short interest was 4.06% as of 05/27/2012. Cynosure, Inc. develops, manufactures, and markets aesthetic treatment systems to the dermatology, plastic surgery, and general medical markets. Its aesthetic treatment systems incorporate a range of laser and other light-based energy sources, including Alexandrite, pulse dye, Nd:Yag, and diode lasers, as well as intense pulsed light. The company's aesthetic treatment systems comprise the Elite product line for hair removal, treatment of facial, and leg veins and pigmentations; the Smartlipo product line for LaserBodySculpting for the removal of unwanted fat; the Cellulaze, SmoothShapes XV, and TriActive product line for the temporary and long-term reduction in the appearance of cellulite; the Affirm/SmartSkin product line for anti-aging applications, such as treatments for wrinkles, skin texture, skin discoloration, and skin tightening; the Cynergy product line for the treatment of vascular lesions; and the Accolade, MedLite C6, and RevLite product line for the removal of benign pigmented lesions, as well as multi-colored tattoos.

5) AtriCure, Inc. (NASDAQ:ATRC)

Sector: Healthcare
Industry: Medical Instruments & Supplies
Market Cap: $148.25M
Beta: 1.36

AtriCure, Inc. has a Current Ratio of 2.80 and Quick Ratio of 2.21 and Analysts' Rating of 1.50. The short interest was 3.62% as of 05/27/2012. AtriCure, Inc., a medical device company, develops, manufactures, and sells cardiac surgical ablation systems designed to create precise lesions, or scars, in cardiac tissue. Its primary product line includes isolator synergy bipolar radio-frequency ablation clamps for open-heart procedures and minimally invasive procedures; ablation and sensing unit, a compact power generator that delivers bipolar radio-frequency (RF) energy; AtriCure switch box, a compact switch box providing the technology needed for the dual pulsing electrodes, and the ability to connect and toggle between multiple RF devices; isolator multifunctional pen, a disposable RF device enabling surgeons to toggle back and forth between temporary pacing, sensing, and stimulation and ablation; and coolrail linear ablation device, a disposable linear RF ablation device, which allows physicians to create an expanded cardiac ablation lesion set during minimally invasive procedures. The company also offers cryoablation system, which consists of various reusable and disposable devices, including the Frigitronics CCS-200 product line for cardiac ablation; and Cryo1, a disposable cryoablation device, as well as AtriClip system, which is designed to exclude the left atrial appendage by implanting the device during concomitant open surgical procedures from the outside of the heart.

*Company profiles were sourced from Finviz. Financial data was sourced from Finviz.

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