If you are looking for ways to keep things interesting in your portfolio, but prefer to steer clear of roller coaster rides, consider investing in mid cap stocks. Here you can find companies that have plenty of room to grow. For the best opportunities, a helpful tool is to investigate a company's liquidity. When it is high, a company maintains the flexibility to make acquisitions and keep options open. The mid cap stocks listed today have that criteria, and the added advantage of receiving a recent rating from analysts as a 'Strong Buy'. We came up with a short, but pretty interesting list - we hope you like it.
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 mid cap stocks. From here, we then looked for companies that have strong liquidity (Current Ratio>2)(Quick Ratio>2). From here, we then looked for companies that analysts rate as "Strong Buy" (mean recommendation < 2). We did not screen out any sectors.
Do you think these mid-cap stocks are worth more than their current valuations? Use our list to help with your own analysis.
1) EchoStar Corp. (SATS)
EchoStar Corp. has a Current Ratio of 3.67, a Quick Ratio of 3.52, and an Analysts' Rating of 1.50. The short interest was 1.35% as of July 29, 2012. EchoStar Corporation, together with its subsidiaries, engages in the design, development, and distribution of digital set-top boxes and related products. The company's EchoStar Technologies segment designs, develops, and distributes digital set-top boxes and related products and technology, including Slingbox placeshifting technology primarily for satellite television (TV) service providers, and telecommunication and cable companies that allow consumers to watch and control their home digital video and audio content through a broadband Internet connection; and Slingboxes for consumers through retail outlets. This segment also provides digital broadcast operations comprising satellite uplinking/downlinking, transmission services, signal processing, conditional access management, and other services primarily to DISH Network.
2) Konami Corp. (KNM)
|Industry:||Multimedia & Graphics Software|
Konami Corp. has a Current Ratio of 2.39, a Quick Ratio of 2.06, and an Analysts' Rating of 1.00. The short interest was 0.01% as of July 29, 2012. Konami Corporation develops, publishes, markets, and distributes video game software products for stationary and portable consoles, as well as for use on personal computers. It operates in four segments: Digital Entertainment, Gaming & Systems, Pachinko & Pachinko Slot Machines, and Health & Fitness.
The Digital Entertainment segment offers video game software, social games for social networking services Web sites, content for mobile phones and token-operated games, online games, music and video package products, video games for amusement facilities, and card games, as well as electronic toys, figures, and character goods. This segment also builds computer systems related to online games, maintains and operates online servers, and purchases and distributes video game software for home use.
3) Sterlite Industries (India) Ltd. (SLT)
Sterlite Industries (India) Ltd. has a Current Ratio of 2.52, a Quick Ratio of 2.23, and an Analysts' Rating of 1.00. The short interest was 1.38% as of July 29, 2012. Sterlite Industries (India) Limited operates as a non-ferrous metals and mining company in India and internationally. The company's primary products consist of copper cathode and continuous cast rods, as well as sulphuric acid, phosphoric acid, anode slimes, and gypsum. It also produces and sells zinc ingots for steel producers, as well as alloy, dry cell battery, die casting, and chemical manufacturers; lead ingots for battery and chemical manufacturers; and by-products, including sulphuric acid, and silver ingots primarily to industrial users and traders of silver.
In addition, the company offers aluminum products, including aluminum ingots and wire rods; rolled products, such as coils and sheets for aluminum foil manufacturing, printing, transportation, consumer durables, building and architecture, electrical and communications, packaging, and general engineering industries.
*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.