When it comes to tech stocks, growth and liquidity are key traits for picking winners. Growth is what keeps tech companies ahead of their competitors, and liquidity gives a company the ability to make big acquisitions if it sees investment opportunities, weather possible lulls in demand, or most importantly, keep a company's doors open. Are these the types of tech stocks that you're looking for? We ran a screen to help you on your search.
EPS growth (earnings per share growth) illustrates the growth of earnings per share over time. The 5-Year Expected EPS Growth Rate is a long term annual growth estimate, where the growth projections are made by analysts, the company or other credible sources.
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 technology stocks. From here, we then looked for companies that have high future earnings per share growth forecasts(5-year projected EPS Growth Rate>25%). We then looked for companies that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We did not screen out any market caps.
Do you think these stocks offer both value and growth? Use this list as a starting-off point for your own analysis.
1) Fusion-io, Inc. (FIO)
|Industry:||Data Storage Devices|
Fusion-io, Inc. has a 5-Year Projected Earnings Per Share Growth Rate of 31.00%, a Current Ratio of 9.03, and a Quick Ratio of 7.49. The short interest was 24.63% as of 07/03/2012. Fusion-io, Inc. engages in the development, marketing, and sale of storage memory platforms for data decentralization in the United States. Its platforms enhance the processing capabilities within a datacenter by relocating process-critical or active data from centralized storage to the server where it is being processed. The company's storage memory platform includes ioDrive and ioCache products; directCache data-tiering software; ioTurbine virtualization software; and ioSphere platform management software.
2) Comtech Telecommunications Corp. (CMTL)
Comtech Telecommunications Corp. has a 5-Year Projected Earnings Per Share Growth Rate of 35.00%, a Current Ratio of 6.58, and a Quick Ratio of 5.65. The short interest was 9.12% as of 07/03/2012. Comtech Telecommunications Corp. designs, develops, produces, and markets products, systems, and services for communications solutions in the United States and internationally. The company's Telecommunications Transmission segment provides satellite earth station equipment and systems, such as satellite earth station modems, block up converters, power amplifiers, transceivers, access devices, voice gateways, IP encapsulators, and media routers. This segment also offers over-the-horizon microwave equipment and systems that transmit voice, video, and data, as well as markets data compression integrated circuits.
3) Kyocera Corp. (KYO)
Kyocera Corp. has a 5-Year Projected Earnings Per Share Growth Rate of 45.60%, a Current Ratio of 3.91, and a Quick Ratio of 2.98. The short interest was 0.01% as of 07/03/2012. Kyocera Corporation develops, produces, and distributes ceramic, semiconductor, and electronic products for the information and communications markets, and environment and energy markets worldwide. The company offers thin ceramic based substrates; thin-film ceramic/alumina tape substrates; sapphire substrates; automobiles engine components; mechanical seals; and thread guides for yarn texturing machines; rings for fishing rods and nozzles; and papermaking machinery parts. It also provides various ceramic packages and components and LSI ceramic packages. In addition, the company offers solar energy products, cutting tools, medical and dental implants, and jewelry products and applied ceramic related products.
*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.