Some investors classify tech stocks as too risky, but with careful screening, there are plenty of opportunities that should not be overlooked. Especially if a company has significant cash reserves. When a company is well-funded, it has the means to form strategic partnerships, make acquisitions, and continue research and development. To minimize risk, we searched specifically today for tech stocks at the mid-cap range with a high level of liquidity. Analysts have given all of the listed stocks a rating of 'Buy' or better. We think you will be intrigued by what we found.
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 technology stocks. We then screened for businesses that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We next screened for businesses that analysts rate as "Buy" or "Strong Buy" (mean recommendation < 3).
Do you think these mid-cap stocks have higher to rise? Use our screened list as a starting point for your own analysis.
1) Dolby Laboratories, Inc. (NYSE:DLB)
Dolby Laboratories, Inc. has a Current Ratio of 7.67, a Quick Ratio of 7.59, and a Analysts' Rating of 2.40. The short interest was 11.10% as of 08/16/2012. Dolby Laboratories, Inc. provides products, services, and technologies for the entertainment industry worldwide. It designs and manufactures video and audio products for film production, cinema, and television broadcast industries; and provides services to support film production, television broadcast, and music production. The company is involved in licensing technologies in signal processing systems that enhance sound quality or enable surround sound in movie soundtracks, DVDs, Blu-ray Discs, personal computers, digital televisions, mobile devices, video games, satellite and cable broadcasts, and online streaming; and developing technologies for mobile devices for 3D, digital cinema, post-production, and LED backlit LCD televisions.
2) Cree, Inc. (NASDAQ:CREE)
|Industry:||Semiconductor Equipment & Materials|
Cree, Inc. has a Current Ratio of 7.80, a Quick Ratio of 6.54, and a Analysts' Rating of 2.30. The short interest was 15.25% as of 08/16/2012. Cree, Inc. develops and manufactures light emitting diodes [LEDS], LED lighting, and semiconductor solutions for wireless and power applications. Its LED products include blue and green LED chips that are used in various applications, including video screens, gaming displays, function indicator lights, and automotive backlighting; LED components comprising a range of packaged LED products and LED modules for lighting applications; LED lighting products, such as LED downlights, LED troffers, and LED lamps or bulbs for construction, retrofit, and renovation projects in commercial, governmental, and residential applications; and silicon carbide (SiC) wafers, which are used in the manufacture of optoelectronics, microwave, power switching, and other applications. The company also provides semiconductor materials and devices primarily based on silicon carbide (SiC), gallium nitride (GaN), and related compounds.
3) Marvell Technology Group Ltd. (NASDAQ:MRVL)
|Industry:||Semiconductor - Integrated Circuits|
Marvell Technology Group Ltd. has a Current Ratio of 4.80, a Quick Ratio of 4.24, and a Analysts' Rating of 2.30. The short interest was 1.19% as of 08/16/2012. Marvell Technology Group Ltd. designs, develops, and markets analog, mixed-signal, digital signal processing, and embedded and standalone ARM-based microprocessor integrated circuits. It offers mobile and wireless products comprising communications processors; modem processors; Wi-Fi and other communication protocols, including Bluetooth and/or FM; mobile computing products; and connected home computing products. The company also provides a range of integrated data storage products, including hard disk drive, solid-state drive, hybrid hard disk drive, and optical disk drive controllers, as well as storage-system products.
4) NVIDIA Corporation (NASDAQ:NVDA)
|Industry:||Semiconductor - Specialized|
NVIDIA Corporation has a Current Ratio of 4.12, a Quick Ratio of 3.74, and a Analysts' Rating of 2.40. The short interest was 1.85% as of 08/16/2012. NVIDIA Corporation provides graphics chips for use in smartphones, personal computers [PC], tablets, and professional workstations markets worldwide. It operates in three segments: Graphic Processing Unit [GPU], Professional Solutions Business [PSB], and Consumer Products Business [CPB]. The GPU segment offers GeForce discrete graphics and chipset products, which support desktop and notebook PC's, as well as sells flash memory products.
5) Portugal Telecom SGPS SA (NYSE:PT)
Portugal Telecom SGPS SA has a Current Ratio of 5.77, a Quick Ratio of 5.64, and a Analysts' Rating of 2.50. The short interest was 0.10% as of 08/16/2012. Portugal Telecom, SGPS S.A., together with its subsidiaries, provides telecommunications services in Portugal, Brazil, sub-Saharan Africa, and Asia.
6) IPG Photonics Corporation (NASDAQ:IPGP)
|Industry:||Semiconductor - Integrated Circuits|
IPG Photonics Corporation has a Current Ratio of 5.81, a Quick Ratio of 4.63, and a Analysts' Rating of 1.60. The short interest was 27.14% as of 08/16/2012. IPG Photonics Corporation develops and manufactures fiber lasers, fiber amplifiers, and diode lasers. Its laser products include low, medium, and high output power lasers from 0.5 to 2 microns in wavelength; fiber pigtailed packaged diodes and fiber coupled direct diode laser systems; high-energy pulsed lasers, multi-wavelength and tunable lasers, and single-polarization and single-frequency lasers; solid-state lasers; laser diode chips and packaged laser diodes operating at 9XX nanometers; and high power optical fiber delivery cables, fiber couplers, beam switches, chillers, and accessories.
7) Syntel, Inc. (NASDAQ:SYNT)
|Industry:||Information Technology Services|
Syntel, Inc. has a Current Ratio of 5.66, a Quick Ratio of 5.50, and a Analysts' Rating of 2.00. The short interest was 5.05% as of 08/16/2012. Syntel, Inc. provides information technology [IT] and knowledge process outsourcing [KPO] services worldwide. It operates in four segments: Applications Outsourcing, KPO, e-Business, and TeamSourcing. The Applications Outsourcing segment provides software applications development, maintenance, testing, migration, and infrastructure services.
*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.