When most investors think of large cap stocks, few consider them as growth opportunities. Our belief is that given the right fundamentals, market, and assets, certain large cap stocks can eventually attain mega-cap status. Today we focused on large cap stocks that we think have the potential for substantial growth, due to strong cash reserves and solid earnings. We think you'll like the list we came up with.
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 large cap stocks. Next, we then screened for businesses that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We then looked for businesses that have expected earnings per share growth of more than 25 percent for next year(1-year projected EPS Growth Rate>25%). We did not screen out any sectors.
Do you think these large-cap stocks have a positive future in store? Please use our list to assist with your own analysis.
1) Goldcorp Inc. (GG)
Goldcorp Inc. has a Current Ratio of 3.12, a Quick Ratio of 2.50, and a 1-Year Projected Earnings Per Share Growth Rate of 36.64%. The short interest was 0.57% as of 06/06/2012. Goldcorp Inc. engages in the acquisition, development, exploration, and operation of precious metal properties. It primarily explores gold, silver, copper, lead, and zinc. The company's principal mining properties include Red Lake, Porcupine, and Musselwhite gold mines in Canada; Peasquito gold/silver/lead/zinc mine, and Los Filos and El Sauzal gold mines in Mexico; Marlin gold/silver mine in Guatemala; Alumbrera gold/copper mine in Argentina; and Marigold and Wharf gold mines in the United States.
2) Yamana Gold, Inc. (AUY)
Yamana Gold, Inc. has a Current Ratio of 2.82, a Quick Ratio of 2.45, and a 1-Year Projected Earnings Per Share Growth Rate of 33.33%. The short interest was 0.49% as of 06/06/2012. Yamana Gold Inc. engages in the exploration, development, and production of mineral properties, primarily gold. It also explores for copper, molybdenum, zinc, and silver metals. The company's property portfolio includes seven operating gold mines, including Chapada mine, Jacobina mining complex, and Fazenda Brasileiro mine in Brazil; El Pen mine and Minera Florida mine in Chile; Gualcamayo mine in Argentina; and Mercedes mine in Mexico.
3) Lululemon Athletica Inc. (LULU)
|Industry:||Textile - Apparel Clothing|
Lululemon Athletica Inc. has a Current Ratio of 5.10, a Quick Ratio of 4.09, and a 1-Year Projected Earnings Per Share Growth Rate of 27.61%. The short interest was 10.92% as of 06/06/2012. lululemon athletica inc., together with its subsidiaries, designs, manufactures, and distributes athletic apparel for women, men, and female youth. The company's line of apparel and accessories include fitness pants, shorts, tops, and jackets for healthy lifestyle activities, such as yoga, running, and general fitness. Its fitness-related accessories comprise bags, socks, underwear, yoga mats, instructional yoga DVDs, and water bottles.
4) Freeport-McMoRan Copper & Gold Inc. (FCX)
Freeport-McMoRan Copper & Gold Inc. has a Current Ratio of 3.51, a Quick Ratio of 2.11, and a 1-Year Projected Earnings Per Share Growth Rate of 29.78%. The short interest was 2.06% as of 06/06/2012. Freeport-McMoRan Copper & Gold Inc. engages in the exploration, mining, and production of mineral resources. The company primarily explores for copper, gold, molybdenum, cobalt hydroxide, silver, and other metals, such as rhenium and magnetite. It holds interests in various mines located in the Grasberg minerals district in Indonesia; Morenci minerals district in North America; South America; and Tenke Fungurume minerals district in the Democratic Republic of Congo.
5) Altera Corp. (ALTR)
|Industry:||Semiconductor - Specialized|
Altera Corp. has a Current Ratio of 4.07, a Quick Ratio of 3.96, and a 1-Year Projected Earnings Per Share Growth Rate of 26.90%. The short interest was 1.85% as of 06/06/2012. Altera Corporation, a semiconductor company, designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and associated development tools. The company's PLDs consist of field-programmable gate arrays (FPGAs) and complex programmable logic devices (CPLDs), which are standard semiconductor integrated circuits or chips to perform desired logic functions in the electronic systems; and HardCopy structured ASIC devices that comprise transition customer designs from high-density FPGAs to low-cost non-programmable implementations for volume production. Its products primarily include Stratix series high-end, system-level FPGAs; Arria series mid-range transceiver and embedded processor equipped FPGAs; Cyclone series low-cost transceiver and embedded processor equipped FPGAs; MAX series CPLDs; and HardCopy ASICs. The company's products also comprise intellectual property cores in hard and soft forms that are pre-verified building blocks that execute system-level functions; and development tools consisting primarily of the Quartus II software for design entry, design compilation, design verification, and device programming.
6) Regeneron Pharmaceuticals, Inc. (REGN)
Regeneron Pharmaceuticals, Inc. has a Current Ratio of 4.35, a Quick Ratio of 4.18, and a 1-Year Projected Earnings Per Share Growth Rate of 165.35%. The short interest was 7.01% as of 06/06/2012. Regeneron Pharmaceuticals, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines for the treatment of serious medical conditions in the United States. The company's commercial products include EYLEA (aflibercept) Injection for the treatment of neovascular age-related macular degeneration; and ARCALYST (rilonacept) injection for subcutaneous use for the treatment of cryopyrin-associated periodic syndromes, including familial cold auto-inflammatory syndrome and muckle-wells syndrome in adults and children. Its products under Phase III clinical development stage consists of EYLEA for the treatment of serious eye diseases; ZALTRAP (Aflibercept), which is developed in oncology; and ARCALYST for the prevention of gout flares in patients initiating uric acid-lowering treatment.
7) Alexion Pharmaceuticals, Inc. (ALXN)
Alexion Pharmaceuticals, Inc. has a Current Ratio of 2.30, a Quick Ratio of 2.03, and a 1-Year Projected Earnings Per Share Growth Rate of 40.22%. The short interest was 1.95% as of 06/06/2012. Alexion Pharmaceuticals, Inc., 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.
*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.