Companies that have made it to the mid cap level know that lean times can be part of the equation. That is why the more successful companies build up cash reserves. It provides a cushion to weather out those dips and come back strong. Today we developed a list of mid cap stocks that have a high level of liquidity. When a company has flush reserves, it grants more freedom and security. Additionally, these stocks have received a recent 'Buy' rating from industry analysts. We think you will find our list worthy of further research.
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. Then we screened for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). Next, then looked for businesses with a large amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We did not screen out any sectors.
Do you think these mid-cap stocks will trade at a higher valuation? Use our list to help with your own analysis.
1) Guess? Inc. (GES)
Guess? Inc. designs, markets, distributes, and licenses lifestyle collections of contemporary apparel and accessories for men, women, and children that reflect the American lifestyle and European fashion sensibilities. The company's clothing collection includes jeans, pants, skirts, dresses, shorts, blouses, shirts, jackets, knitwear, and intimate apparel.
2) ResMed Inc. (RMD)
|Industry||Medical Appliances & Equipment|
ResMed Inc., through its subsidiaries, engages in the development, manufacture, and distribution of medical equipment for treating, diagnosing, and managing sleep-disordered breathing and other respiratory disorders. It offers various products for the treatment of obstructive sleep apnea and other respiratory disorders, including airflow generators, diagnostic products, mask systems, headgear, ventilation devices, and other accessories, such as cold passover humidifiers, carry bags, and breathing circuits. The company also offers data communications and data control products, such as ResLink, ResControl, ResControl II, TxControl, ResScan, and ResTraxx modules that facilitate the transfer of data and other information to and from the flow generators.
3) Helix Energy Solutions Group, Inc. (HLX)
|Industry||Oil & Gas Equipment & Services|
Helix Energy Solutions Group, Inc., together with its subsidiaries, operates as an offshore energy company. It provides reservoir development solutions and other contracting services to the energy market, as well as to its oil and gas properties. The company offers various contracting services in the Gulf of Mexico, North Sea, the Asia Pacific, and west Africa regions primarily in deepwater.
4) Patterson Companies Inc. (PDCO)
|Industry||Medical Equipment Wholesale|
Patterson Companies, Inc. distributes dental, veterinary, and rehabilitation supplies. Its Dental Supply segment offers consumable dental supplies, such as X-ray films and solutions; impression and restorative materials; hand instruments; sterilization and infection control products; anesthetics; paper, cotton, and disposable products; toothbrushes; dental accessories; printed office products, office filing supplies, and practice management systems; radiography equipment, hand pieces, dental chairs, dental hand piece control units, diagnostic equipment, sterilizers, dental lights, chair-side restoration systems, and inter-oral cameras; and custom hardware and networking solutions.
This segment also develops and markets software for scheduling, billing, charting, and capturing/storing/retrieving digital images, as well as sells software products of third parties; offers electronic patient education services to dental practices; and provides software, dental office design, and equipment financing, as well as equipment installation, repair, and maintenance services.
5) Helmerich & Payne Inc. (HP)
|Industry||Oil & Gas Drilling & Exploration|
Helmerich & Payne, Inc. engages in the contract drilling of oil and gas wells. It provides drilling rigs, equipments, personnel, and camps on a contract basis to explore for and develop oil and gas from onshore areas and fixed platforms, tension-leg platforms, and spars in offshore areas. The company conducts land drilling operations primarily in Oklahoma, California, Texas, Wyoming, Colorado, Louisiana, Mississippi, Pennsylvania, Utah, Arkansas, New Mexico, Alabama, Montana, North Dakota, and West Virginia; offshore drilling operations in the Gulf of Mexico, offshore of California, Trinidad, and Equatorial Guinea; and international land drilling operations in Ecuador, Colombia, Argentina, Mexico, Tunisia, and Bahrain.
6) Riverbed Technology, Inc. (RVBD)
|Industry||Networking & Communication Devices|
Riverbed Technology, Inc. provides solutions to the fundamental problems associated with information technology performance across wide area networks (WANs) in the United States and internationally. It primarily offers Steelhead products, which enable its customers to improve the performance of their applications and access to their data across WANs, as well as supports the riverbed services platform.
The company's Steelhead product family includes the Steelhead Mobile client software application that provides mobile workers with LAN-like access to corporate files and applications; Virtual Steelhead appliance to extend the reach of WAN optimization; Cloud Steelhead, a solution that is purpose-built for public cloud computing environments; Central Management Console that provides centralized configuration, monitoring, and control for simplifying the process of deploying and managing Steelhead products distributed across a WAN; and Interceptor appliance, which allows organizations to scale their WAN optimization solutions.
7) Clearwire Corporation (CLWR)
Clearwire Corporation, through its subsidiaries, provides fourth generation wireless broadband services in the United States. The company builds and operates mobile broadband networks that offer high-speed mobile Internet and residential Internet access services. It serves retail customers through its CLEAR brand.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on August 21, 2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.