We all want to receive a clean bill of health when we visit the doctor. The companies we invest in are no different, but making sure they are running like a fine tuned machine isn't always an easy task. The measurements we used today to find vital stocks in the tech sector are analyst ratings and liquidity. They are rated 'Strong Buy' and are equally fit when it comes to liquidity. These companies are all chart toppers. Take a look to see if you agree.
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. We then screened for businesses that analysts rate as "Strong Buy" (mean recommendation < 2). We then screened for businesses that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We did not screen out any market caps.
Do you think these stocks have strong fundamentals? Use our list along with your own analysis.
1) Agilent Technologies Inc. (A)
|Industry:||Scientific & Technical Instruments|
Agilent Technologies Inc. has a Analysts' Rating of 1.50, a Current Ratio of 3.28, and a Quick Ratio of 2.76. The short interest was 1.50% as of 08/05/2012. Agilent Technologies, Inc. provides bio-analytical and electronic measurement solutions to the communications, electronics, life sciences, and chemical analysis industries worldwide. Its Electronic Measurement segment offers electronic measurement instruments and systems, and software design tools that are used in the design, development, manufacture, installation, deployment, and operation of electronics equipment and microscopy products. Its products consist of communications and general purpose test products.
2) Microsemi Corp. (MSCC)
|Industry:||Semiconductor - Integrated Circuits|
Microsemi Corp. has a Analysts' Rating of 1.50, a Current Ratio of 2.96, and a Quick Ratio of 2.02. The short interest was 6.21% as of 08/05/2012. Microsemi Corporation engages in the design, manufacture, and marketing of analog and mixed-signal integrated circuits (IC) and semiconductors primarily in the United States, Europe, and Asia. Its products include radio frequency (RF) and power components, analog and RF integrated circuits (IC), standard and customizable system-on-chip solutions, and mixed-signal and radiation-tolerant field programmable gate arrays. The company also offers subsystems and modules that include application-specific power modules and Power-over-Ethernet midspans. Its individual component semiconductor products include silicon rectifiers, zener diodes, low leakage and high voltage diodes, temperature compensated zener diodes, transistors, subminiature high power transient suppressor diodes, and pin diodes used in magnetic resonance imaging (MRI) machines.
3) IXYS Corp. (IXYS)
|Industry:||Semiconductor - Specialized|
IXYS Corp. has a Analysts' Rating of 1.50, a Current Ratio of 6.07, and a Quick Ratio of 3.97. The short interest was 3.58% as of 08/05/2012. IXYS Corporation, an integrated semiconductor company, designs, develops, manufactures, and markets power semiconductors, digital and analog integrated circuits (ICS), and systems and radio frequency power semiconductors worldwide. Its power semiconductors include power metal-oxide-silicon field-effect transistors; insulated-gate bipolar transistors; and thyristors and rectifiers, such as fast-recovery epitaxial diodes, which are primarily used to control electricity in power conversion systems comprising uninterruptible power supplies and switch-mode power supplies; motor drives; medical electronics; and renewable energy sources, such as wind turbines and solar systems. The company's ICs comprise solid state relays; line card access switch and data access arrangements integrated products; high voltage, mixed-signal, and analog application specific integrated circuits; power management and control ICs; and microcontrollers that are primarily used in telecommunications, display, power management, security systems, and appliances. Its RF power semiconductors consist of field-effect transistors, pseudomorphic-high-electron-mobility transistors, and gunn diodes, which enable the amplification and reception of radio frequencies in wireless infrastructure, industrial RF applications, medical systems and defense and space electronics; and systems and other products comprise laser diode drivers, high voltage pulse generators and modulators, high power subsystems, and direct copper bond substrates that are used in power semiconductor industry.
4) Geeknet, Inc. (GKNT)
|Industry:||Internet Software & Services|
Geeknet, Inc. has a Analysts' Rating of 1.50, a Current Ratio of 5.13, and a Quick Ratio of 4.15. The short interest was 3.08% as of 08/05/2012. Geeknet, Inc. operates an online network for the global geek community comprising technology professionals, technology enthusiasts, and general consumers of technology-oriented goods, services, and media. The company operates through two segments, e-Commerce and Media. The e-Commerce segment sells geek-themed retail products for technology enthusiasts and general consumers through the ThinkGeek.
5) FEI Company (FEIC)
|Industry:||Scientific & Technical Instruments|
FEI Company has a Analysts' Rating of 1.50, a Current Ratio of 3.23, and a Quick Ratio of 2.44. The short interest was 8.99% as of 08/05/2012. FEI Company supplies scientific instruments for nanoscale imaging, analysis, and prototyping that enable research, development, and manufacturing in industrial, academic, and research institutional applications. Its products include transmission electron microscopes and scanning electron microscopes (SEMs); DualBeam systems, which include a SEM and focused ion beam system (FIB) on a single platform; and stand-alone FIBs. The company's Electronics segment offers products used in laboratories to enhance new product development and increase yields by enabling 3D wafer metrology, defect analysis, root cause failure analysis, and circuit edit for modifying device structures in the semiconductor equipment and related industries, such as manufacturers of data storage equipment, solar panels, and light-emitting diodes.
*Company profiles were sourced from Google Finance and Yahoo Finance. 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.