4 Cash Heavy Tech Stocks That Are Projected To Grow

by: ZetaKap

In the world of business, money makes things happen. Without it, companies can flounder. Keeping this in mind, we looked at stocks in the technology sector that have significant cash reserves. While liquidity is a great asset for any company because it provides funding for expansion and a cushion during economic lulls, it all depends on how those cash reserves are leveraged to take the company to the next level. To find stocks of this nature, we were specifically interested in finding liquid tech stocks that have EPS growth rates of 25% or greater. The summaries below provide a place to start your investigation.

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 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.

We first looked for technology stocks. Then we looked for companies that have strong liquidity (Current Ratio>2)(Quick Ratio>2). Next, we screened for businesses that have high future earnings per share growth forecasts(5-year projected EPS Growth Rate>25%). We did not screen out any market caps.

Do you think these stocks will continue to see such strong profitability? Use our list along with your own analysis.

1) Immersion Corporation (NASDAQ:IMMR)

Sector Technology
Industry Computer Peripherals
Market Cap $152.35M
Beta 1.68

IMMR stock chart


Current Ratio 5.30
Quick Ratio 5.26
5-Year Projected Earnings Per Share Growth Rate 30.00%
Short Interest 4.98%

Immersion Corporation develops, manufactures, licenses, and supports a range of hardware and software technologies and products that enhance digital devices with touch interaction. The company provides haptic technologies that allow people to use their sense of touch when operating various digital devices. It licenses its technologies to the original equipment manufacturers or their suppliers to include technologies in products comprising mobile phones, video console gaming, consumer electronics, medical simulation and surgical robotic systems, and automotive controls sold under their own brand names.

2) Acorn Energy, Inc. (NASDAQ:ACFN)

Sector Technology
Industry Computer Peripherals
Market Cap $151.87M
Beta 0.90

ACFN stock chart


Current Ratio 5.88
Quick Ratio 5.59
5-Year Projected Earnings Per Share Growth Rate 30.00%
Short Interest 19.45%

Acorn Energy, Inc., through its subsidiaries, provides technology driven solutions for energy infrastructure asset management worldwide. It offers sonar and acoustic related solutions for energy, defense, and commercial markets with a focus on underwater site security for strategic energy installations and other acoustic systems, as well as develops and produces real-time embedded hardware and software. The company also develops and markets remote monitoring systems to electric utilities and industrial facilities, which are used in a range of utility applications, including outage management, power quality monitoring, system planning, trouble shooting and proactive maintenance, and condition monitoring; and provides the intelligence to transmission and distribution network operators.

3) Cohu, Inc. (NASDAQ:COHU)

Sector Technology
Industry Semiconductor Equipment & Materials
Market Cap $223.62M
Beta 1.45

COHU stock chart


Current Ratio 5.06
Quick Ratio 3.48
5-Year Projected Earnings Per Share Growth Rate 27.00%
Short Interest 2.99%

Cohu, Inc. provides semiconductor test equipment, microwave communication systems, and video cameras. Its Semiconductor Equipment segment develops, manufactures, and sells pick-and-place semiconductor test handlers, burn-in related equipment, and thermal sub-systems to semiconductor manufacturers and semiconductor test subcontractors. This segment also offers gravity-feed and test-in-strip semiconductor test handling equipment, and micro electro mechanical systems (MEMS) test modules used in final test operations.

4) Fusion-io, Inc. (NYSE:FIO)

Sector Technology
Industry Data Storage Devices
Market Cap $2.65B
Beta -

FIO stock chart


Current Ratio 7.49
Quick Ratio 6.49
5-Year Projected Earnings Per Share Growth Rate 31.00%
Short Interest 26.48%

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.

*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on August 19, 2012.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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